Latest update — Former FTX CEO Sam Bankman-Fried trial [Day 3]

Cointelegraph reporters are on the ground in New York for the trial of previous FTX CEO Sam “SBF” Bankman-Fried. 5: Yedidia interrogation in focusDay 3 of the #SBF trial, were early and here brilliant!

4: DOJ and Bankman-Frieds defense state their argumentsThe very first hours of SBFs trial have actually offered a glimpse of the arguments the United States Department of Justice (DOJ) and the former FTX CEOs defense will bring to court in the coming weeks.After a jury choice in the early morning, both celebrations offered opening declarations to the 12-person jury present in the court.The DOJ took a hard stance versus Bankman-Fried in its first statement, representing the FTX creator as someone who intentionally lied to financiers to improve himself and expand his crypto empire.According to the DOJ, Bankman-Fried lied to FTX financiers and clients, using Alameda as a crucial partner to “take customers funds,” an expression that was regularly used throughout the opening statements.An indication outside Sam Bankman-Frieds trial location in New York. He presumed that endeavor capital firms had actually done due diligence on FTX and its leadership.During the questioning, district attorneys stressed that the trader utilized FTX specifically for area trading and was uninformed that the exchange utilized client funds for crypto trading with Alameda Research.Questions for Yedidia were focused on his instructional background at the Massachusetts Institute of Technology, where he first fulfilled Bankman-Fried and had two expert experiences with the FTX founder. He declared his intent to battle extradition from the Caribbean country however changed his mind after a week in Bahaman prison and consented to extradition.Meanwhile, FTX co-founder Gary Wang and Alameda Research CEO (and reportedly sometime SBF girlfriend) Ellison agreed to plead guilty in the burgeoning case.November: FTX collapsesBankman-Frieds difficulties started when reports emerged on Nov. 2 that Alameda Research had a large holding of FTX Token (FTT), FTXs energy token.

Also on Nov. 8, Bankman-Fried revealed on Twitter that he had pertained to a contract with Zhao “on a tactical deal.” He wrote, “Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all properties will be covered 1:1.”On Nov. 9, Zhao revealed that Binance would not pursue the acquisition of FTX after due diligence and more reports of mishandled funds. The cost of Bitcoin (BTC) dropped to $15,600. The FTX and Alameda Research websites went dark for a few hours. When the FTX website came back, it bore a warning against making deposits and was not able to procedure withdrawals.On Nov. 10, Bankman-Fried posted a 22-part Twitter thread that began with “Im sorry.” It was the very first of a long string of public declarations he made about the exchanges fall. The following day, the whole staff of Alameda Research stopped, and FTX, FTX US and Alameda Research submitted for personal bankruptcy in the United States. Bankman-Fried resigned as FTX CEO and was changed by John J. Ray III, who was best known for his function in the Enron bankruptcy.SBF and FTX prior to the fallAt the start of 2022, FTX had a $32-billion evaluation and was believed to be in enviable financial condition. Bankman-Fried was seen as a respected magnate by much of the crypto community and the world at large. He was photographed with political leaders and spoke at congressional hearings. Maxine Waters is chairing the examination into FTX https://t.co/oFMctH4rRh pic.twitter.com/Ox6O5w4nOl— Jordan Schachtel @ dossier.today (@JordanSchachtel) November 17, 2022.

He had gotten a reputation as a philanthropist, pursuing a philosophy popular among academics called “reliable selflessness.” Part of his application of that approach was political activism in the type of financial backing for candidates.As the crypto winter embeded in, Bankman-Fried spoke of FTX and Alameda Researchs “obligation to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion.” The companies made a quote for Voyager Digital that was rebuffed.FTX made an offer with Visa to introduce its own debit card in 40 countries.Bankman-Fried, Ellison and other alumni of Jane Street Capital established Alameda Research in 2017. Bankman-Fried went on to discovered FTX with Wang in 2019. Zhao was an early investor in the exchange.This is an establishing story, and further details will be added as it appears.

4: DOJ and Bankman-Frieds defense state their argumentsThe very first hours of SBFs trial have actually offered a look of the arguments the United States Department of Justice (DOJ) and the previous FTX CEOs defense will bring to court in the coming weeks.After a jury selection in the morning, both celebrations provided opening declarations to the 12-person jury present in the court.The DOJ took a difficult stance against Bankman-Fried in its very first statement, depicting the FTX founder as someone who intentionally lied to financiers to improve himself and broaden his crypto empire.According to the DOJ, Bankman-Fried lied to FTX financiers and customers, using Alameda as a crucial partner to “steal consumers funds,” an expression that was often used during the opening statements.A sign outside Sam Bankman-Frieds trial area in New York. Testaments will continue throughout the day.According to the defense, Bankman-Fried presumed FTX was allowed to loan funds to Alameda as part of a company relationship with the market maker, and there was no secret door for deals in between the companies.Prosecutors likewise kept in mind that Caroline Ellison, Gary Wang and Nishad Singh will provide the jury expert details about Bankman-Frieds function in FTXs operations and declared criminal activities.”In the second half of the very first day of the trial, the jury heard from two witnesses: Mark Julliard, a French trader and former customer of FTX, and Adam Yedidia, a friend of Sam Bankman-Fried and previous employee at Alameda Research and FTX.In his testament, Julliard said he had 4 Bitcoin (BTC) held at FTX at the time of the exchanges collapse, worth almost $100,000. He presumed that endeavor capital firms had actually done due diligence on FTX and its leadership.During the questioning, prosecutors stressed that the trader used FTX solely for spot trading and was unaware that the exchange utilized customer funds for crypto trading with Alameda Research.Questions for Yedidia were focused on his academic background at the Massachusetts Institute of Technology, where he initially satisfied Bankman-Fried and had two professional experiences with the FTX founder. He stated his objective to combat extradition from the Caribbean nation but changed his mind after a week in Bahaman jail and consented to extradition.Meanwhile, FTX co-founder Gary Wang and Alameda Research CEO (and supposedly at some point SBF sweetheart) Ellison concurred to plead guilty in the growing case.November: FTX collapsesBankman-Frieds difficulties started when reports emerged on Nov. 2 that Alameda Research had a big holding of FTX Token (FTT), FTXs utility token.

Other Questions People Ask

What were the key arguments presented by the DOJ during Day 3 of the trial of former FTX CEO Sam Bankman-Fried?

During Day 3 of the trial, the Department of Justice (DOJ) portrayed Sam Bankman-Fried as someone who deliberately misled investors to enhance his own wealth and expand his crypto empire. They emphasized that Bankman-Fried used Alameda Research to misappropriate customer funds, a claim that was central to their opening statements. The prosecution's narrative painted a picture of intentional deceit, suggesting that Bankman-Fried was fully aware of the financial misconduct occurring within FTX.

How did Bankman-Fried's defense respond to the DOJ's accusations on Day 3 of the trial?

In response to the DOJ's accusations, Bankman-Fried's defense argued that he believed FTX was permitted to lend funds to Alameda Research as part of a legitimate business relationship. They contended that there was no hidden agenda or secret transactions between the two entities. This defense aims to establish that Bankman-Fried did not act with malicious intent, but rather operated under a misunderstanding of the operational protocols between FTX and Alameda.

What role did Adam Yedidia play in Day 3 of the trial against Sam Bankman-Fried?

Adam Yedidia, a friend of Bankman-Fried, was one of the witnesses who testified during Day 3 of the trial. His questioning focused on his educational background at MIT and his professional experiences with Bankman-Fried, which provided insight into their relationship. Yedidia's testimony is expected to shed light on Bankman-Fried's character and decision-making processes within FTX, potentially influencing how the jury perceives the former CEO's actions.

What implications did the testimonies from FTX co-founders have on Day 3 of Sam Bankman-Fried's trial?

The testimonies from FTX co-founders, including Gary Wang and Caroline Ellison, are crucial as they are expected to provide expert insights into Bankman-Fried's role in the alleged criminal activities at FTX. Their cooperation with the prosecution suggests they may offer damaging information about Bankman-Fried's decisions and operations within the company. This could significantly impact the jury's understanding of the case and sway their judgment regarding Bankman-Fried's culpability.

What events led to the downfall of FTX prior to Sam Bankman-Fried's trial?

The downfall of FTX began with alarming reports on November 2, indicating that Alameda Research held a substantial amount of FTX Token (FTT), raising concerns about financial stability. Following this, Bankman-Fried attempted to reassure investors through social media but ultimately faced a liquidity crisis when Binance withdrew its acquisition offer. The situation escalated rapidly, leading to FTX and Alameda Research filing for bankruptcy on November 11, marking a significant turning point that set the stage for the current trial.