Sam Bankman-Fried’s Trial Nears Finish as Closing Arguments Are Made

Sam Bankman Fried, the onetime cryptocurrency mogul, designed his FTX crypto trade into a “pyramid of deceit” resting on a “foundation of lies and fake claims,” a federal prosecutor mentioned on Wednesday at the legal fraud demo.

Mr. Bankman-Fried’s lawyer countered that his 31-calendar year-old customer was basically a “math nerd” who may well have designed some undesirable business conclusions, but had fully commited no crimes and never advised everyone to break the legislation.

Those people divergent messages shaped the core of the closing arguments in Mr. Bankman-Fried’s demo on Wednesday in a Manhattan courtroom. Nicolas Roos, the prosecutor, started by declaring that Mr. Bankman-Fried was a liar who was accountable for FTX’s collapse previous year, which experienced remaining clients unable to recuperate their deposits.

Mr. Bankman-Fried, who experienced testified during the demo in his own defense, had “lied about massive matters and modest items,” Mr. Roos stated, pointing out that the defendant mentioned he “couldn’t recall” much more than 140 moments in response to questions on cross-evaluation.

Then Mark Cohen, a law firm for Mr. Bankman-Fried, stated in his closing argument that the FTX founder had acted in very good faith. “Time and all over again, the prosecution has sought to flip Sam into some sort of villain, some form of monster,” he explained.

Their dueling remaining arguments came after 15 days of testimony in Mr. Bankman-Fried’s demo, which is just one of the most higher-profile monetary criminal offense situations in years and which has moved significantly far more speedily than predicted. The outcome of the situation will be witnessed as a referendum not only on the speedy rise and tumble of Mr. Bankman-Fried’s organization empire, which at its peak was valued at $32 billion, but also on the volatile crypto field, which only two many years ago was riding high right before melting down past calendar year.

The stunning implosion of FTX very last November established off a chain reaction that led to the collapse of other crypto companies. Mr. Bankman-Fried’s arrest and subsequent prices also set off regulatory crackdowns across the crypto universe.

At the coronary heart of Mr. Bankman-Fried’s scenario is whether or not he fully commited fraud and taken care of FTX as his particular piggy lender. Prosecutors contend that he stole as a lot as $10 billion from FTX’s prospects to shell out for investments in other crypto corporations, invest in lavish serious-estate in the Bahamas, the place the trade was headquartered, and prop up a crypto investing firm he also started, Alameda Research.

Mr. Bankman-Fried has pleaded not guilty to seven counts of fraud, conspiracy and funds laundering. If convicted, he could confront what amounts to a everyday living sentence.

Carl Tobias, a professor at the University of Richmond College of Law, said the prosecution presented a powerful scenario and made a sensible conclusion in “framing this subject as a back garden-wide range fraud case, relatively than a extra intricate cryptocurrency scenario.”

Mr. Bankman-Fried’s demo, which commenced on Oct. 4, has showcased a lot of harming testimony. Prosecutors known as 16 witnesses, like 3 of Mr. Bankman-Fried’s former prime lieutenants, each individual of whom had pleaded responsible to fraud and conspiracy costs and agreed to testify from their former boss. The defense, for its section, referred to as just a few witnesses, one particular of whom was Mr. Bankman-Fried.

At the demo, the prosecution’s three star witnesses — Caroline Ellison, Nishad Singh and Gary Wang, who all labored with Mr. Bankman-Fried — testified that the FTX founder knew for several months that his shelling out spree was unsustainable and improperly fueled by FTX’s purchaser revenue that had been transferred to Alameda. They also reported Mr. Bankman-Fried knew Alameda could not pay out back the billions that it had misappropriated from FTX, with Alameda’s personal debt to FTX hid from consumers and investors.

In response, Mr. Bankman-Fried and his attorneys argued that he was unaware right until just a few months before FTX collapsed that billions in client income had been misused. Mr. Bankman-Fried testified that he had imagined Alameda’s investing came from company money, not shopper revenue. Any issues that were designed, Mr. Bankman-Fried mentioned, have been created in very good faith and not supposed to defraud anybody.

FTX was supposed to “move the ecosystem ahead,” he testified at a single issue. “It turned out the reverse of that.”

Under cross-evaluation for virtually 7 hours more than two times, Mr. Bankman-Fried was questioned continuously about his quite a few general public statements about FTX and how those ran counter to what unfolded guiding the scenes at the trade. Mr. Bankman-Fried usually hemmed and hawed in response to concerns about his general public promises that FTX was one of the most secure crypto exchanges in the small business.

He was also unable to explain how FTX’s consumer cash could have been funneled to Alameda to pay out for making out his crypto empire without him recognizing about it. At times, he efficiently reported that former staff members who testified in opposition to him had been not telling the real truth.

For closing arguments on Wednesday, Damian Williams, the leading federal prosecutor in New York, sat in the entrance row of the courtroom, accompanied by other authorities officers. Mr. Bankman-Fried’s parents, who have been fixtures in the gallery during the trial, huddled in the courtroom in the early morning but left in advance of the government’s presentation started. Mr. Bankman-Fried sat with his attorneys, wearing the identical grey match and purple tie he wore on the stand in new times.

Standing at the lectern, Mr. Roos went above the highlights of the testimony from the prosecution witnesses, like their statements that Alameda experienced special privileges with FTX, this sort of as a $65 billion line of credit score that permitted the trading agency to borrow billions from FTX’s customers. Mr. Bankman-Fried held individuals distinctive privileges solution, Mr. Roos claimed, “because he understood they were improper.”

The prosecutor also went more than the inconsistencies in Mr. Bankman-Fried’s testimony with those of his previous employees. He exhibited charts with headings like “The defendant’s lies to the public” and “The defendant’s bogus tweets in November.” He presented digital documents that confirmed Mr. Bankman-Fried had seemed at incriminating documents that he mentioned he could not remember acquiring found.

Mr. Roos also pointed out circumstances exactly where Mr. Bankman-Fried appeared to intentionally use FTX’s shopper deposits, including to buy back again FTX equity from Binance, a competing crypto trade.

Mr. Cohen started his closing argument by expressing prosecutors went out of their way to emphasis on Mr. Bankman-Fried’s look. “We’ll concur there was a time when Sam was in all probability the worst-dressed C.E.O. and experienced the worst haircut,” Mr. Cohen said, including that those weren’t crimes.

The prosecution’s retelling of FTX’s collapse was exaggerated and cinematic, Mr. Cohen said. “In the real entire world, as opposed to the film world, issues can get messy,” he reported, including that the large shelling out by FTX and Alameda “were fair company expenses” and not a misuse of client revenue.

Mr. Bankman-Fried acted in superior faith with his business choices and lacked the felony intent to defraud anyone, Mr. Cohen reported. It was the prosecution’s stress to verify guilt past a sensible question, he extra, and Mr. Bankman-Fried was not obligated to establish anything.

Mr. Bankman-Fried testified “because he wanted to inform you what took place,” Mr. Cohen reported. “It is really hard to think of a extra stress filled situation than that. He was significantly from polished. He was himself, he was Sam. He instructed you when he did not recall things.”

The jury of 9 women of all ages and a few gentlemen is anticipated to start deliberating on a verdict immediately after Decide Lewis A. Kaplan of U.S. District Court instructs the jurors on the relevant legislation.