In the multi-billion-dollar fraud case that caused thousands of FTX customers to lose their funds, the trial finally got underway on Wednesday. Sam Banman-Fried appeared in court with a haircut and a suit, an unusual sight for the man known for his casual attire and curly hair. Bankman-Fried, who faces 13 charges, including wire fraud and theft, arrived 30 minutes late on his first day in court.

Defence Starts with a Bang

As the trial entered into its first day, the jury heard for the first time from both the defence and prosecution. Defence lawyer Mark Cohen made some bold remarks to start, claiming Bankman-Fried did not steal from anyone.

Cohen tried to portray his client as a “math nerd” who made some ‘oversight’ mistakes concerning risk management. He said, “There was no theft. Sam didn’t defraud anyone. Sam didn’t intend to defraud anyone. Sam acted in good faith.”

He quickly tried to deflect responsibility from his client, arguing that “Sam and his colleagues were building the plane as they were flying it. No one person – no one CEO, certainly not Sam, could be everywhere and do everything.”

Is the Defendant Just a Nerd or a Scheming Criminal?

The prosecution painted a substantially different picture of Bankman-Fried. It alleged that the 31-year-old is a calculated criminal using customer funds for his personal use, treading FTX as a personal bank account.

The previous girlfriend of the accused, Caroline Ellison, has pleaded guilty to fraud, money laundering, and conspiracy charges. The former CEO of Alameda Research, the trading arm of FTX, is expected to be a key witness in the trial. Her statements will gravitate around Bankman-Fried’s involvement and knowledge of how dire things were at Alameda.

Though the defence will likely try and shift blame to Ellison, Cohen said, “it’s not a crime to run a company that ends up going through a storm.”

Did SBF Knowingly Commit Fraud?

However, it will be difficult for Bankman-Fried and his defence team to prove just that, the core question. Did Bankman-Fried really not know what was going on, or did he, as the prosecution claims, knowingly commit fraud?

Crypto-focused attorney Zack Shapiro told CNBC,

“The core of this trial is going to be about intent […] This trial is about ‘did Sam Bankman-Fried knowingly commit fraud by taking what was supposed to be customer assets on FTX, the exchange, that were supposed to be held in segregated wallets’ […] and did he lent them out knowingly to Alameda the hedge fund to essentially gamble them away and use them for improper purposes.”

12-person Jury Commences

The jury was finally formed on Wednesday and consists of 12 people who will have to decide whether Bankman-Fried committed fraud in a trial that also puts crypto in the spotlight. While some, like New York Times journalist David Yaffe-Bellany, claim that the whole industry is on trial, others like FTX’s CEO John J. Ray, who is responsible for restructuring the company, called it “just old-fashioned embezzlement.”

He told Congress early on in a hearing that FTX had next to no record-keeping and that customer funds were used for FTX staff’s personal purpose. Ray said the whole thing was “Not sophisticated at all. Sophisticated, perhaps in the way they are hiding something, frankly, right in front of their eyes.”

The post Key Points on First Day of Trial for SBF As Defence Claims He Was Just a Math Nerd appeared first on Crypto News Australia.

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Filed under: Bitcoin - @ October 5, 2023 1:55 am