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Sam Bankman-Fried has been painted as a “cartoon villain” by prosecutors whose case relies upon largely on hindsight, the previous cryptocurrency tycoon’s attorneys advised a Manhattan jury on Wednesday as they laid out their defence in the beginning of the hotly anticipated prison trial.
In opening arguments earlier on Wednesday, US prosecutors had accused Bankman-Fried of committing “fraud on a massive scale”, mendacity to buyers, lenders and clients of his FTX crypto exchanges.
“This man stole billions of dollars from thousands of people,” assistant US legal professional Thane Rehn advised jurors, pointing forcefully at Bankman-Fried, who sat impassively on the defence desk.
Bankman-Fried used the proceeds of a crypto empire “built on lies” to purchase lavish homes and court docket celebrities such as Tom Brady, as properly as politicians together with former Democratic president Bill Clinton, Rehn stated.
But Mark Cohen, a lawyer for Bankman-Fried, responded in a soft-spoken opening that his consumer — whom he addressed as “Sam” — was the sufferer of a “hindsight case” and had acted in good religion.
“He was a math nerd who didn’t drink or party,” Cohen advised the jury. “Taking something out of context and in hindsight and calling it improper is not proof beyond a reasonable doubt.”
The duelling statements kicked off what is anticipated to be a six-week trial to resolve the destiny of the 31-year-old former billionaire, who was till final 12 months one of many main figures within the freewheeling world of cryptocurrency buying and selling.
Bankman-Fried, who sat in court docket carrying a gray go well with, has formally denied the fees and maintained his innocence in quite a few media interviews given earlier than he was jailed in August for allegedly making an attempt to intimidate witnesses. Prosecutors confirmed on Tuesday that they’d not at any time provided Bankman-Fried a plea deal.
His mother and father, regulation professors Joe Bankman and Barbara Fried, stared on the ground within the packed courtroom as the federal government laid out the case towards their son.
The prosecutors’ case rests closely on the testimony of three central witnesses, former lieutenants to Bankman-Fried who agreed to co-operate with the federal government and are anticipated to take the stand within the coming days.
Rehn advised the jury the witnesses “will give you an insider view of how the defendant’s crimes occurred”. He stated Bankman-Fried used his former “girlfriend” Caroline Ellison — the chief government of FTX’s sister agency, crypto hedge fund Alameda — “as a front” to assist conceal his management of the corporate.
The trial will hinge on the credibility of those witnesses. “Be careful as you hear from them,” Cohen advised the jurors, saying their hopes of receiving lighter sentences gave them an incentive to verify the federal government’s story.
Cohen stated Bankman-Fried had urged Ellison to hedge Alameda’s dangerous cryptocurrency investments in early 2022, however she didn’t, worsening the monetary crunch when crypto costs collapsed later within the 12 months.
“He relied on her and he trusted her,” Cohen stated. As a busy chief government, Bankman-Fried “could [not] be everywhere and do everything”.
Ellison is anticipated to take the stand within the coming days. Prosecutors stated they may also name FTX buyers to testify, as properly as clients who suffered from the corporate’s chapter.
A who’s who of high Silicon Valley and Wall Street buyers backed FTX with about $1.8bn earlier than its collapse. The authorities’s opening included screenshots of tweets through which Bankman-Fried reassured FTX clients that their cash was protected, and referred to congressional testimony that might be launched as proof.
The case is being heard by a jury of 12 members and 6 alternates, whittled down from a gaggle of just about 50. The decide quizzed would-be jurors on their experiences with cryptocurrencies and prior information of the case. The chosen jury includes three males and 9 ladies, together with a social employee, a highschool librarian and a retired corrections officer.
Judge Lewis Kaplan requested the jurors if they’d watched a Sunday interview with writer Michael Lewis, who had shadowed Bankman-Fried for months earlier than and through his fall from grace for his newest e-book, which was revealed on Tuesday. Lewis, who stated FTX had “a great real business” advised CBS News the e-book was meant to be a “kind of letter to the jury”.