Crypto Mogul Sam Bankman-Fried Faces Damning Evidence in Trial
New York, CNN — The trial of fallen crypto mogul Sam Bankman-Fried is in its second week and the prosecution has presented compelling evidence against him. Bankman-Fried, the former CEO of the FTX crypto exchange, is facing seven counts of fraud and conspiracy, including allegations of stealing billions of dollars from customers to cover losses at his other firm, Alameda Research.
The prosecution called Caroline Ellison, the former CEO of Alameda and Bankman-Fried’s ex-girlfriend, as a key witness. Ellison testified for three days, offering insight into the inner workings of Alameda and FTX. She presented financial documents that she claimed were dishonest and designed to hide Alameda’s unstable financial situation. Ellison also described Bankman-Fried’s disheveled appearance as a deliberate PR move to portray himself as an eccentric entrepreneur.
Ellison’s testimony implicated Bankman-Fried in various actions, with her repeatedly stating that he directed her to carry out actions, criminal or otherwise. However, it is important to note that Ellison has pleaded guilty and is cooperating with the prosecutors in hopes of receiving a lighter sentence. She, like Bankman-Fried, faces the possibility of a maximum sentence of 110 years in prison.
The defense team cross-examined Ellison for about six hours, prompting objections from the prosecution and exasperation from the judge. The defense also attempted to challenge Ellison’s statements by presenting a recording of an all-hands meeting where she attributes the decision to repay loans with customer funds to Bankman-Fried.
In addition to Ellison’s testimony, a former software developer at Alameda named Christian Drappi also testified. He recounted a meeting where Ellison mentioned that the decision to repay loans with customer funds was made by Bankman-Fried. The timing of this recording is crucial as it supports Ellison’s prior consistent statements before she was approached by law enforcement.
Furthermore, Ellison testified about an instance where she believes Bankman-Fried ordered Alameda to wire approximately $100 million to two crypto wallets in China. She claimed that the funds were a bribe to unfreeze crypto trading accounts worth about $1 billion held by Alameda in China. She also mentioned a failed scheme involving “Thai prostitutes” to drain the accounts and transfer the value to Alameda.
As the trial continues, the big question is whether Bankman-Fried will testify in his defense. Legal experts suggest that testifying could be a game-changer for Bankman-Fried, as it would provide an opportunity to present his side of the story. However, there are risks involved in taking the stand.
Prosecutors initially expected to finish presenting their case by October 25, but it is possible that they may wrap up earlier if they believe they have presented enough evidence of the alleged fraud.