Former cryptocurrency darling Sam Bankman-Fried knowingly “stole” money from customers on his FTX platform, prosecutors said Wednesday during her arraignment in a New York court.
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“What happened does not concern complex issues related to cryptocurrencies,” said Nicolas Roos, representative of Manhattan federal prosecutor Damian Williams. “It’s about deception, lies, theft, greed.”
Sam Bankman-Fried is on trial in New York for using funds deposited by customers without their knowledge on his cryptocurrency exchange platform FTX, which went bankrupt in November 2022. If convicted, he could face up to 110 years in prison.
The risky transactions and investments of his investment company Alameda Research drove up to 14 billion dollars.
“One of the questions (to which the jury must answer) is to determine whether he knew that it was wrong to take this money,” explained Nicolas Roos.
“He knew it. “He did it anyway,” emphasized the representative of the public prosecutor’s office. “He thought he could get away with it because he was smart.”
In order to exonerate the defendant, “one must assume that he did not understand anything” about what was going on in his own company, according to the representative of the public prosecutor’s office. “You have followed the entire trial and know that none of it is true,” he insisted.
During hearings in that trial, which began on October 3, Sam Bankman-Fried admitted to making “big mistakes” in his management but always denied breaking the law. During his testimony a few days ago, he stated in particular that he had only been informed about Alameda’s financial situation very late. He also assured that he had given – and, in his opinion, not followed – instructions on how to deal with the risks taken by Alameda.
Nicolas Roos recalled that three witnesses, former close associates of “SBF”, had all confirmed that the former little genius of cryptocurrencies had given instructions so that Alameda could put almost unlimited money in the pockets of FTX customers.
“It’s fraud,” said Nicolas Roos. “It’s theft, pure and simple.”
Alameda was authorized to borrow up to $65 billion from FTX.
In the spring of 2022, the cryptocurrency industry was rocked by a series of outages that caused the value of almost all digital currencies and Alameda assets to plummet.
According to the Manhattan federal prosecutor’s office, just over $8 billion was missing from customers at the time of the bankruptcy of FTX, then the world’s second-largest cryptocurrency exchange.