18.07 BST
Bankman-Fried “a math nerd who acted in good faith,” his lawyer says
Bankman-Fried’s lawyerMark Cohen, painted a completely different portrait for the jury in his opening statement.
“Sam didn’t cheat on anyone. Sam wasn’t planning on cheating on anyone. “Sam acted in good faith,” he said.
There was no theft.
Bankman-Fried believed the loans were “permissible,” he said. He also criticized the prosecution’s portrayal of Bankman-Fried as ruthlessly money-minded.
They would be led to believe that he was a real villain – almost a cartoon character of a villain.
In reality, Bankman-Fried was a normal guy, Cohen said.
He was a math nerd who didn’t drink or party.
Bankman-Fried looked at Cohen during his opening. During the prosecutor’s opening statement, he appeared to be looking ahead.
Updated 18.07 BST
18.05 BST
SBF’s ex-girlfriend, Caroline Ellison, will testify about how he “repeatedly stole clients’ funds,” prosecutors say
The prosecutor also explained how the former Alameda CEO Caroline Ellison will play a role in the process.
She will tell you how she and the defendant stole the money that customers had entrusted to FTX. She will testify that she and the defendant repeatedly took client money to spend and invest through Alameda.
Updated at 18.05 BST
18.02 BST
Prosecutor Thane Rehn described how the alleged financial crimes worsened.
Sam Bankman Fried started slowly by withdrawing some of the money from the bank accounts and FTX depositors and sending it to Alameda.
For a while, customers were able to make withdrawals from their accounts because he left some money on FTX.
Over time, the defendant used Alameda to withdraw more and more customer funds from FTX, and the money the defendant stole really began to add up. By summer 2022, the defendant had withdrawn more than $10 billion in customer funds from FTX through Alameda – $10 billion stolen from thousands of customers.
That, combined with Bankman-Fried’s poor views on investments, created a perfect storm, he said.
“At his direction, Alameda had made a series of risky investments in cryptocurrencies,” the prosecutor said.
Alameda didn’t have enough money to pay its bills. He doubled his bet – the defendant withdrew even more money from FTX.
Updated 18.02 BST
17.47 BST
Customers “had no way of knowing that SBF earned and spent billions of dollars,” the indictment says
The public prosecutor’s office also began to look into the background to the alleged financial crimes.
“Customers sometimes deposited dollars [into] FTX for trading crypto. When customers sent dollars to FTX, the company told them that the money was in their accounts with FTX.” Thane Rehn said.
The money never actually made it to FTX. Instead, the defendant opened a bank account that was under the control of Alameda, his other company.
So when customers thought their money was going into the exchange, they were actually sending their money directly into the defendant’s pocket.
The defendant took billions of dollars in FTX customer deposits from Alameda bank accounts and spent them – and customers had no way of knowing their money was being used in this way.
Updated at 17:47 BST
17.45 BST
Bankman-Fried “used Caroline Ellison as a front,” prosecutors say
Prosecutor Thane Rehn indicated Caroline EllisonAlameda’s role in the companies’ downfall describes her as his romantic partner, who is installed as Alameda’s leader.
He used her as a cover – in reality, he was still in charge at Alameda.
Ellison, the former chief executive of FTX sister company Alameda Research, pleaded guilty late last year to seven felonies, including wire fraud, securities fraud and money laundering.
Updated at 17.51 BST
17.40 BST
Prosecutor Thane Rehn paints a portrait of Sam Bankman Fried as a kind of cryptocurrency pied piper, supposedly tricking hapless victims into believing their money is safe by repeatedly reassuring them.
“The defendant assured customers that FTX was holding their money for them and that they could withdraw their money at any time,” Rehn said.
He also said that FTX would not use customers’ money for itself… In other words, the defendant promised customers that the money they invested in FTX was still there – it was not FTX’s money.
The defendant ran commercials like this one on television and the Internet saying that FTX was the most trustworthy way to buy and sell Bitcoin. That’s right, FTX’s advertising slogan was about how customers can trust the company.
Updated at 17.40 BST
17.35 BST
Bankman-Fried’s wealth and power “are based on lies,” prosecutors say
The prosecution’s opening arguments have just begun. Prosecutor Thane Rehn quickly described how Sam Bankman Fried‘s high-flying life was based on a fraudulent house of cards.
A year ago, it looked like Sam Bankman-Fried was on top of the world. He ran a huge company called FTX. He lived in a 30 m² apartment in the Bahamas. He jetted around the world in private planes. He dated celebrities like Tom Brady and politicians like Bill Clinton.
His face appeared on magazine covers. He had wealth. He had power. He had influence.
But it was all based on lies. Behind the curtain, Sam Bankman-Fried was not who he seemed. He used his company FTX to commit fraud on a large scale. And the money he spent building his empire – it was money he stole from FTX’s customers. He committed a massive fraud, taking billions of dollars from thousands of victims.
Sam Bankman-Fried, the defendant, perpetrated a massive fraud, taking billions of dollars from thousands of victims.
Updated at 17.52 BST
17.14 BST
There are already problems with the jury. A man who was singled out requests his dismissal on the grounds that he works the graveyard shift, which makes it difficult for him to appear in court in the morning.
Another juror asked to be excused because he had “no legal experience and worked two jobs,” Kaplan said.
The man, who had a non-refundable plane ticket for Friday, asked when the court case would end so he could rebook his flight (at a cost of about $1,000, he noted in a note to Kaplan). One woman expressed concern about missing a doctor’s appointment.
Kaplan is upset.
He told the juror, who apologized, saying he was unfamiliar with legal issues, that he would hear about it at trial.
As for the man working the graveyard shift, Kaplan was unmoved. He told the man that if he had mentioned this earlier he probably would have been excused.
The ship has sailed, so to speak, so do your best.
“It won’t be the first time something like this has happened, and here it is,” Kaplan told the jury about the night shift roster.
I don’t want to be mean or anything, [but] We’ve just apologized to a lot of people in the last two days.
Updated at 17.14 BST
16.58 BST
The jury for Sam Bankman-Fried’s trial has now been selected, paving the way for opening arguments set to begin this afternoon.
Attorneys and U.S. District Judges Lewis Kaplan reduced a pool of 45 potential jurors to a 12-member panel with six alternates that included a 47-year-old high school librarian who lives with her sister and has two cats, and a 68-year-old retired investment banker from Stanford Business attended school, according to Portal.
Bankman-Fried’s parents, Stanford Law School professors Joseph Bankman and Barbara Fried, were seen arriving at the federal courthouse in Lower Manhattan that morning. They did not attend the hearing on Tuesday.
Updated at 16.58 BST
16.46 BST
Opening statement in court after jury selection is complete
The final steps in jury selection in the fraud trial are now complete Sam Bankman Fried in New York. A short break was called.
Opening statements are expected to begin this afternoon, where Bankman-Fried will plead not guilty to seven charges.
Updated at 16.55 BST
15.51 BST
The trial continues with jury selection
Prospective jurors are given a microphone in the courtroom with which they can tell the parties about their profession, age, family situation and whether they have ever served on a jury. This is a normal process.
When describing her family situation, one woman mentioned that she had a cat, more specifically a “British Shorthair.”
The possible panelists have different backgrounds. One is a social worker. Another is a train conductor.
One man drew the wrath Judge Kaplan. He said:
I have a non-refundable plane ticket to California.
It was for his daughter’s parents’ college weekend, he said.
Kaplan sighed heavily into the microphone and said something to the effect of, “Well, that’s all well and good.”
The man asked Kaplan if he wanted more information from him. The judge answered in the affirmative.
All right, we’ll get back to you.
Updated 16.02 BST
15.37 BST
The trial of Sam Bankman-Fried began its second day on Wednesday with even more jury selection.
At 9:59 a.m. the prospective jurors returned to the courtroom. Judge Lewis Kaplan, The trial’s presiding judge said Tuesday he expects jury selection to be completed this morning and expects opening statements shortly thereafter.
As the potential jurors entered the stately courtroom at 500 Pearl Street in downtown Manhattan, Bankman-Fried, again wearing a gray suit, stood before them with his hands folded.
His gaze shifted between the phalanx of jurors and the jury box.
As the prospective jurors were seated, Bankman-Fried looked at his laptop screen and sometimes typed.
Updated at 15.37 BST
15.29 BST
Sam Bankman-Fried’s parents go to court
Sam Bankman Fried‘s parents, Joseph Bankman And Barbara Fried, were seen arriving at the Manhattan courthouse on the second day of their son’s trial.
Updated at 15.56 BST
15.15 BST
Sunil Kavuri is not an inexperienced investor. Sure, he hasn’t always worked in finance: 20 years ago he was a model. He and his identical twin brother were the stuff of human interest stories in local newspapers, straight-A boys from Rugby in Warwickshire who excelled in economics, were both on their way to a master’s degree in finance at Cambridge and were picked up by the O2 to promote Big Brother. Maybe you remember the ad: Two guys with floppy hair playing on a sofa.
However, Kavuri then worked for Deutsche Bank, Morgan Stanley and then JP Morgan before leaving in 2012 to invest on his own. In 2015, he began investing in cryptocurrencies, primarily Bitcoin, which he viewed as “digital gold”: “It has all the properties of gold, but is easier to store and therefore better than gold.” The premise of Bitcoin is , that the supply is limited to 21 million, so it is a finite resource. “I saw Bitcoin as a better, more portable version,” he says. “It has a financial offering, it is perfectly divisible, it is fungible.”
But then, in the fall of 2022, the value of crypto collapsed. As a creditor of the crypto exchange platform FTX founded by Sam Bankman Fried, Kavuri lost $2.1m (£1.8m). He is attempting to recover these funds through a class action lawsuit.
This presents laypeople like me with a number of questions. When people say they lost millions of dollars, was any of it real? How was the Bankman-Fried hype different from the tulip mania or other speculative bubbles? What exactly are we seeing given the cryptocurrency collapse last year? Was it an Enron-style event – a solid business brought down by bad actors? Or was it more of a 2007-style event – a dysfunctional system involving everyone who should have known better? Is this distinction actually real or is the line between functional and dysfunctional a little blurrier?
Read the whole story here.
Crypto King or Fraudster: Will Sam Bankman-Fried be sent into the abyss for a century?
Updated at 15.15 BST
15.01 BST
What will the defense look like?
Some court documents from Sam Bankman FriedThe team has suggested that its defense wants to portray him as a misunderstood figure whose behavior was motivated by a desire to help those in need rather than greed for garden variety.
“The defendant in this case suffers from ADHD, which could affect things like his physical behavior, body language, or eye contact,” Bankman-Fried’s attorneys would like to note. His lawyers also want to ask about effective altruism.
Court filings also indicate that his team wants to mount an “advice of counsel” defense – meaning that Bankman-Fried’s law firm did not inform him of any wrongdoing, suggesting he lacked criminal intent. Judge Lewis Kaplan gave them the green light to interview government witnesses about recreational drug use within certain parameters.
Updated at 15.01 BST