Discreditation Galore: SBF Crypto Trial Kicks-Off

6 Oct 2023 by Rory Kejzerko 3 min read

Just two days after its official commencing, we have our first updates from the spotlighted criminal trial of FTX founder Sam Bankman-Fried (SBF).

With potentially facing up to 115 years behind bars for his slew of illicit charges, the alleged crypto fraudster was seen frequently tapping away on a laptop that wouldn’t have been connected to the internet. This was done whilst sitting anxiously between two lawyers with a fresh new suit and haircut on show.

Source: https://www.reuters.com/

The Prosecution

Assistant US Attorney Thane Rehn led proceedings from the prosecution side of things, with his main message being that 'Sam Bankman-Fried was committing a massive fraud and taking billions of dollars from thousands of victims’. To do so, Rehn argued that he was pouring ‘other people's money into his own investments to try to make himself even richer’.

Whilst speaking to the courtroom, Rehn referenced how SBF would’ve been ‘on top of the world’ this time last year whilst running his business from his ‘$30 million apartment in the Bahamas’. Additionally, he also cited SBF’s celebrity friendship-flings with the likes of Bill Clinton and Tom Brady, as well as his efforts to ‘gain influence’ in Washington through making multimillion dollar political donations.

In a poignant statement, he then followed by stating that ‘but all of that was built on lies,’ and that SBF ‘was not who he appeared to be’.

The Defence

In response, the defendant’s lawyer Mark Cohen stated that SBF 'didn't intend to defraud anyone,’ and that he was 'acting in good faith'. Further, Cohen accused the prosecution of painting SBF as a cartoon villain - despite the fact that he’s a 'math nerd who didn't drink or party’ in reality.

That being said, Cohen did acknowledge that ‘some things got overlooked’ at FTX, however to compensate for this, he likened the company’s come-up to ‘building a plane as you're flying it'.

Further, Cohen stated that SBF saw FTX as a 'good, innovative, profitable, dealing with a liquidity crisis and they could get through this'.

In addition to his cartoon villain reference, Cohen also mocked the prosecution’s focus on SBF’s seemingly chaotic apartment, stating that it’s using a stereotypical cop-out that involves a ‘bad guy’ stealing money, going to the Caribbean, and buying an apartment.

Cohen also took a swipe at the prosecution witnesses (i.e. SBF’s former friends and employees, including Caroline Ellison), stating that they were going to be 'spinning things that were good faith decisions that they were fine with but are now claiming were sinister and deceitful'.

Other Talking Points

For now, it remains ambiguous as to whether the defence’s discreditation of prosecutors and witnesses will resonate with the 8-person jury. Such cohort of SBF-fate-deciders was sworn-in on Tuesday, and is comprised of a physician's assistant, an unemployed social worker, a high school librarian, a paediatric nurse, a retired corrections officer, a US Postal Service vehicle maintenance worker, an advertising exec, and a special education teacher.

As for what they’ll be pondering over, SBF has denied a total of 13 criminal counts between 2019 and 2021, which include wire fraud, money laundering, and violations of campaign finance laws. Further, seven of these are being dealt with in this 6-week trial, with the remaining to be resolved next year.

Beyond the main narrative behind SBF’s multibillion dollar fraudulent activities, other interesting side-storylines of the case include his parent’s, ex-girlfriend’s, and ex-employees’ involvements in the FTX collapse. Of course, the small matter of maximising investor refunds also has to be solved.