Sam Bankman-Fried is a bad client
Why Did Bankman-Fried Get What He Wanted to Learn? The How to Make a Case for the Prosecutor
At this time last year, Bankman-Fried was CEO of the FTX exchange which had a luxurious lifestyle and he was delivering his lines in a student play. Bankman-Fried hung out with Tom Brady. He lived in a $30 million penthouse and had time to hang out with some of the top politicians in the world. Rehn said that all of that was built on lies.
Rehn detailed how Bankman-Fried took money from FTX customers “to make himself even richer.” He bought property for family, friends, and himself, and he made speculative investments.
Whether Bankman-Fried takes the stand or not will only be decided, says Estes, once the strength of the prosecution’s case becomes clear. He is not required to testify. It is his decision. We’ll just have to wait and see,” she says. If the government fails to prove its case, the defense might not need to take any action at all.
In any criminal case, the decision to put the defendant on the stand is a “high-stakes moment,” says Allegrante. Doing so exposes them to questioning by the prosecution that they would otherwise avoid, but also to the way specific jurors might interpret their testimony. It introduces additional variables that the defense hopes to control.
Lawyers for Bankman-Fried informed the judge that their client was not getting his full Adderall dose in prison. The defense was setting up the grounds for an appeal, which made it difficult for Bankman-Fried to prepare his defense. Given what I saw today, setting up an appeal seems wise. At the minimum, it is risk management.
I expect to have more to say about Adam Yedidia tomorrow, since he was Bankman-Fried’s college roommate.
Sam Bankman-Fried, a Math geek who didn’t party: Why was the defense bringing this up? A story that Cohen and I learnt about Wall Street, finance, and finance in 2022
In November 2022, things went badly for Julliard. He followed Bankman-Fried on Twitter, and read aloud the “FTX is fine. Assets are fine” tweets, along with “FTX has enough to cover all client holdings. Julliard gave the impression that he was missing money because we didn’t invest client assets. He tried to get his money out on the 8th, but it was too late. We saw screenshots of his withdrawal attempts: $20,000 USD and about 4 Bitcoin, which were worth about $20,000 at the time: about $100,000 money, inaccessible.
The glossy ads featured Gisele Bndchen suggested a very high budget. It wouldn’t make sense to spend that much money if FTX was very strong in its finances. After opening an account and transferring money to the exchange he used to buy the coin, he would sell it back in five to ten years at higher prices.
As Cohen droned on about airplanes, I couldn’t stop thinking about the missing risk officer. Bringing it up, I thought, was a tremendous mistake. The prosecution didn’t mention it. Either Bankman-Fried is stupid — unlikely — or he deliberately didn’t hire a risk officer. Was he worried about what one might find?
The lack of risk officer kept elbowing me in the ribs while Cohen tried to tell me that FTX’s and Alameda’s business relationships were reasonable under the circumstances. “Sam acted in good faith and took reasonable business measures” is a pretty hard pill to swallow with that in mind.
Sure, as Cohen put it, Bankman-Fried was a math nerd who didn’t party. That paints a picture of a man who was very deliberate, since he went to work on Wall Street after leaving MIT. If he had been a party-hardy trainwreck, I could see overlooking a risk officer in order to do another line, or a supermodel, or something else important. Why was the defense bringing this up?
Was Sam Bankman-Fried really a fool? How embarrassed was he when he saw the case? And what did he tell us?
The name of FTX was named because it was a futures exchange which was called “sits between the winners and the losers of bets.” FTX can’t pay out what it owes if the loser pays up. Risk management is a crucial part of the business; risk officers exist to identify business’ potential risks, monitor, and mitigate them. This doesn’t say anything about the regulatory risks.
The defense was going to follow it up. I was very curious, having learned yesterday that Bankman-Fried had never been offered a plea deal since he and his attorneys had told the government they wouldn’t negotiate. Surely there would be some manner of evidence, some something, that would have made him so confident.
I have never seen Sam Bankman-Fried so still as he was during the prosecution’s opening statement. The characteristic leg-jiggling was absent. He barely moved as the prosecutor showed the incriminating evidence against him, including company files, customer information, testimony and his own words.
His hair was shorn, the result of a haircut from a fellow prisoner, the Wall Street Journal reported. He wore a suit bought at a discount at Macy’s, per the Journal; it hung on him. He appeared to have lost some weight.
A Conversation with Adam Yevidia, the First Witness of Bankman-Fried’s Accretion Trade, and his Importance to Computer Science
As the prosecutor spoke to the jury, Bankman-Fried sat almost motionless as he looked at Rehn.
Bankman- Fried’s college roomate was Adam Yevidia. He is as cooperating witness, who has been offered immunity. He worked for Alameda for two months when he was finishing a Ph.D., then was hired back by SBF as a software developer.
The first witness to be called was a commodities trader from London. He said that when the exchange began to fall apart, he was unable to withdraw all his bitcoin, worth a total of $100,000.
Rehn told jurors to scrutinize their testimony carefully. But, he told them, they will offer first-hand insights into the multibillion-dollar fraud the government alleges Bankman-Fried perpetrated with their help.
Cohen told jurors that they will probably receive a lighter sentence as a result of their cooperation, so they should be skeptical of their testimony.
After Bankman-Fried was arrested in December, prosecutors filed criminal charges against four members of his inner circle, including Caroline Ellison, who was Bankman-Fried’s girlfriend at the time and CEO of Alameda Research.
Cohen criticized the government for displaying a photograph to the jury of Bankman-Fried in what was his trademark look before he was sent to jail in August: shorts and a t-shirt, with unkempt hair.
Bankman-Fried, who has been jailed for more than a month, appeared to pay close attention. He took notes on a laptop he is permitted to use during the trial.
Bankman-Fried lived in an apartment in The Bahamas, and traveled all over the world on private planes. Rehn noted Bankman-Fried hung out with actors, athletes, and politicians.
The rise and fall of Bankman-Fried’s empire were shown by Rehn.
He was rich. He had a lot of power. Rehn is an assistant US attorney for the Southern District of New York. “But all of that — all of that — was built on lies.”
Was SBF involved in Alameda even after he had a good CEO? A case against a man who fraudulently fleeced thousands of consumers
Was SBF involved in Alameda even after appointing new CEOs? He owned a large amount of the company, so of course he would be interested. The advertising and the millions spent on the condo in the Bahamas. That was to attract top talent and boost the company, as any smart businessperson would do.
Ultimately, Cohen said, “it’s not a crime to be the CEO of a company that later files for bankruptcy.” The man who had defrauded thousands of consumers sat in court for an entire day while his defense team and the prosecuting lawyer didn’t say anything about him. The trial continues.
