Sam Bankman-Fried Trial seems at Federal Court in New York on Oct. 4th, 2023.
Artist: Claudia Johnson
Marc-Antoine Julliard sometimes trades cocoa beans. But in the spring of 2021, the London-based commodities dealer determined to diversify into cryptocurrency buying and selling. His platform of selection was FTX.
Two years later, Julliard stood because the prosecution’s first witness in the criminal fraud trial against FTX founder Sam Bankman-Fried, who’s accused of misusing billions of {dollars} in consumer cash.
In testimony that lasted round 50 minutes on Wednesday, Julliard recounted his expertise with FTX, together with the “extraordinarily anxious” feeling he had the day he unsuccessfully tried to withdraw a part of the $100,000 price of crypto and money he had saved on the location. He and hundreds of different FTX clients had been virtually worn out when the change went stomach up late final yr.
Like many others, Julliard stated he he was below the impression that there have been “robust financials behind the corporate.”
Julliard is the poster youngster for the case the prosecution laid out in its opening assertion because it tries to show to a jury that shoppers had been led to imagine the cash they saved with FTX was protected. Prospective clients, Julliard stated, had been drawn in by means of savvy marketing, with no cause to imagine that FTX could be repurposing their crypto funds.
In a trial that is set to final six weeks, Bankman-Fried, a person as soon as revered because the “white knight” of crypto, faces seven federal charges, together with wire fraud, securities fraud and cash laundering, that might put him in jail for the remainder of his life.
A jury was seated shortly after 11:30 a.m. (although 4 of the 12 jurors had been already trying to be dismissed). Opening statements started about an hour later. Julliard took the stand simply earlier than 2 p.m. to a packed courthouse in Manhattan.
As the lead witness, Julliard helped lay out the federal government’s narrative. Much of his choice to purchase into FTX had to do with the celebrities and enterprise funds connected to the model. He referenced an advert with supermodel Gisele Bündchen and Formula 1 advertising and marketing. He additionally pointed to prolific media protection, which bolstered his belief in the corporate.
Julliard wasn’t an aggressive crypto trader. He stated he by no means participated in margin buying and selling, or borrowing cash to make purchases, nor did he have interaction in a lending program supplied by the corporate that allowed customers to earn curiosity on idle crypto.
Sam Bankman-Fried sits along with his protection crew throughout his fraud trial over the collapse of FTX, the bankrupt cryptocurrency change, at Federal Court in New York City, U.S., October 4, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
Defense desires clients to shoulder blame
The protection is attempting to make shoppers accountable for what it says had been their decisions to purchase and commerce crypto.
“Sam did not defraud anybody,” stated Mark Cohen, Bankman-Fried’s legal professional, in his opening assertion. Cohen referred to as it a “hindsight case” introduced by the federal government, and stated that simply because individuals lost cash, does not imply the 31-year-old Bankman-Fried dedicated fraud.
Bankman-Fried donned a contemporary swimsuit with a purple tie and a clear haircut — a a lot totally different look than the seaside shorts, sandals and wild curls that helped outline his picture throughout crypto’s heyday. The entrepreneur, who Cohen described as a “math nerd that did not drink or celebration,” diligently took notes on his air-gapped laptop computer as he conversed with each of his attorneys and, throughout breaks, generally stood whereas emphatically motioning along with his fingers as he spoke to his counsel.
Throughout either side’ opening statements, Bankman-Fried saved his eyes skilled on the jury field. His head was turned 90 levels to his proper to watch these who will finally determine his destiny. Bankman-Fried was joined in courtroom by his mother and father, who are each being sued by FTX’s new management for having allegedly “exploited their entry and affect inside the FTX enterprise to enrich themselves…by thousands and thousands of {dollars}.”
Cohen is projecting Bankman-Fried as a startup founder and equated operating FTX and Alameda Research, his sister hedge fund, to “constructing a aircraft whereas flying on it.” He informed the jury that there was no threat administration in place. Specifically, he stated the agency did not have a chief threat officer.
Far from the “cartoon of a villain” that the federal government introduced, Cohen gave totally different explanations for his consumer’s supposedly unlawful actions. One instance handled the key backdoor baked into FTX’s code that prosecutors say gave Alameda a method to borrow a lot wanted capital.
Cohen stated there was nothing secretive about this backchannel in the code base and stated the particular entry to FTX was there as a result of Alameda was initially arrange as a market maker for the crypto change, which wanted the liquidity, particularly in its early days.
Cohen reminded the jury that the three insiders who will take the stand towards Bankman-Fried have all signed cooperation agreements with the federal government.
A $10 billion fraud
The prosecution’s opening assertion was delivered by Assistant U.S. Attorney Thane Rehn. Over the course of a couple of half hour, Rehn drove residence the purpose that on a regular basis buyers had been those who fell sufferer to FTX’s scheme. By the summer season of 2022, he stated, greater than $10 billion had been stolen from hundreds of FTX clients who had trusted custody of their crypto and money to the platform.
Rehn stated the proof would present jurors how Bankman-Fried lied to FTX customers, buyers and lenders, and the way he spent a great quantity of the cash he stole for his personal good. Rehn referenced marketing campaign contributions, for instance, as a technique that Bankman-Fried seemed to curry favor on Capitol Hill.
Rehn referred to as Alameda a “second, smaller and extra secretive firm” based and managed by Bankman-Fried that was integral to the defendant’s alleged scheme.
The authorities additionally teed up its star witness, ex-girlfriend and Alameda’s ex-CEO, Caroline Ellison. She pleaded responsible in December to a number of costs and has been cooperating with the U.S. legal professional’s workplace in Manhattan for months.
Rehn plans to present that Bankman-Fried put in his girlfriend on the high of his hedge fund, although he remained the one calling the photographs behind the scenes.
Allan Joseph Bankman, father of FTX Co-Founder Sam Bankman-Fried, and Barbara Fried, mom of FTX Co-Founder Sam Bankman-Fried, arrive at courtroom in New York, US, on Wednesday, Oct. 4, 2023.
Stephanie Keith | Bloomberg | Getty Images