Imprisonment Inbound: What to Expect From the SBF & FTX Criminal Trial

5 Oct 2023 by Rory Kejzekro 4 min read

Unless you’ve been living under a rock recently, you’ll know that the highly-anticipated trial of Sam Bankman-Fried (SBF) is now upon us…

And unless you’ve been living under a rock for the past 10 months, you’ll know that this all relates to the almighty fraudulent downfall of his once-leading crypto exchange FTX back in November 2022.

The SBF Court Case

SBF’s fate - which has already been hinted at being a ‘very long’ time behind bars by a federal judge - will be decided in a Lower Manhattan New York courtroom. The proceedings began with a jury selection on October 3rd, with the now-in-progress trial expected to last for 6 weeks.

Source: https://www.courtlistener.com/docket/66631291/united-states-v-bankman-fried/

Here, thousands of pages of evidence - from internal team messages to audio recordings - will be trawled through, all in order to get to the bottom of SBF’s involvement in $8 billion worth of FTX customer assets going missing.

Additionally, FTX customers and investors (including those of the non-US variety) will be contacted over the course of the trial.

What to Expect

Now entering the courtroom almost 10 months after SBF was first arrested in the Bahamas, it’s likely that both sides of the case will have devised some rather interesting arguments, legal spins, and framing.

On the prosecution side of things, lawyers will be trying to prove that SBF knowingly defrauded customers and business partners amid the loss of funds chaos…

And on the defence side of things, the argument is said to be that FTX’s in-house and external lawyers were part of the decisions to use auto-deleting messaging platforms, set up legal entities in the US, and fraudulently loan funds to FTX and Alameda Research executives (its closely-tied sister company). These all come amongst other illicit aspects of the relationship between FTX and Alameda.

As of now, it’s still unsure whether SBF will stand for himself to tell his own timeline of events, however as is for the purpose of lawyers, this is probably a bad idea.

Caroline Ellison - SBF’s Ex-Lover

A pivotal part of the case will fall in hands of SBF’s former colleagues, friends, roommates, and other related parties. Here, their evidence - or lack thereof - has the potential to uncover details that we’ve been unbeknownst to over the past 10 months or so.

More specially, the likes of Caroline Ellison, Nishad Singh and Gary Wang - who are all former close friends and roommates of the defendant - will be brought into question. As you may already know, Ellison - the former CEO of Alameda Research and SBF love interest - will face most of the spotlight here, as her heavy involvement in the case has been known from the off (and memed on many occasions).

As for Ellison’ own fate, this is also yet to be sealed as she’s still involved in courtroom antics of her own. This is after she pleaded guilty to fraud charges which related to the alleged theft of FTX customer funds and lying to Alameda lenders. As of now, Ellison is enjoying a $250,000 bail release that she was granted back in August (the same time in which a judge revoked SBF’s bail conditions after he leaked Ellison’s personal diary entries to a reporter).

When it comes to her involvement in SBF’s fate, Ellison’s willingness to testify means that she’s been promised a lighter sentence in her own case. In turn, such circumstances render a very interesting dynamic wherein Ellison’s ‘up close and personal’ testimony could prove pivotal in determining the nature and harshness of SBF’s remaining years.

Ellison will also be referenced in another poignant piece of evidence, which relates to a November 9th recording where she admitted to Alameda Research colleagues that the firm had paid back lenders by ‘borrowing’ funds that belonged to FTX users.

An Interesting Side-Story From the Weekend

Another interesting and surprising new (side) development from the case arose over the weekend. Further, this came by way of the $600 million worth of crypto that was allegedly stolen from FTX via a hack on November 11th 2022 (the same day that it filed for bankruptcy).

For the time being, a large portion of these funds have been sitting stagnant in a crypto wallet, however this past weekend 15,000 ETH (around $26 million) was removed using various routers and privacy tools.

There’s still no explanation as to what happened here, however it’s intuitive to believe that the case won’t be neglected by investigators. And although very (very) speculative, perhaps the saga may involve the several disgruntled ex-FTX employees in whom SBF is currently going after.

Final Thoughts

Throughout the next 6 weeks (or so), expect frequent updates on what’s being leaked from the in-focus New York courtroom.

In reading these, you’ll be a part of a fascinated global network of crypto, DeFi, and TradFi onlookers who are fascinated to hear the custodial fate of a man who once ran a $32 billion-value company (at its peak).

… and if as explosive and chaotic as some of those Bahama penthouse parties/workdays were rumoured to be, perhaps we have the next hit Netflix series on our hands?

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