Defense tries to blame Caroline Ellison for the collapse of FTX By CriptoFácil

2023-10-05 00:17:28

© Reuters SBF trial: Defense tries to blame Caroline Ellison for the collapse of FTX

CriptoFácil – After the formation of the jury of 12 people, the trial of Sam Bankman-Fried (SBF), the co-founder of the “bankrupt” FTX, began this Wednesday (04), on charges of fraud and conspiracy. In its opening statement, the US Department of Justice (DOJ) minced no words in describing what has been called one of the biggest financial scams in the US.

According to the DOJ, the SBF scheme was a “house of cards built on a lie.” Assistant U.S. Attorney Nathan Rehn said the government would present evidence and witnesses that would prove SBF “lied to its clients” and used their money to buy “power and influence.”

According to Rehn, SBF “poured other people’s money into investments” and “spent that money in every way on himself”. Furthermore, he stated that SBF used the money to make political donations in exchange for favors from powerful people on Capitol Hill.

The prosecutor also told the jury that Bankman-Fried diverted client funds to a “smaller, secretive company” called Alameda Research. And that he used more than US$10 billion from FTX to pay Alameda’s debts, ordering the creation of false financial statements to cover up the action. However, these fake statements were leaked onto the internet, triggering the collapse of FTX.

Finally, the prosecutor stated that the DOJ plans to present SBF documents, investor files, financial statements and deleted tweets during the trial.

What the SBF defense said

Bankman-Fried’s defense responded that the former founder of FTX acted in good faith. Furthermore, he stated that the company’s collapse was not his fault but rather that of one of his employees: Caroline Ellison, CEO of Alameda and SBF’s ex-girlfriend.

Lawyers said Ellison — who pleaded guilty and is expected to testify at trial — did not install safeguards. That’s why there was a collapse.

According to the defense, SBF never intended to steal customers’ money:

“He didn’t intend to rob anyone,” said lead defense attorney Mark Cohen, saying the government was taking things out of context. Cohen stated that SBF “worked hard” and that he “couldn’t be anywhere and do everything.”

Bankman-Fried’s lawyers also said there was “nothing wrong with the proximity between FTX and Alameda.”

By CriptoFácil