Crypto’s Golden Boy Gets His Day in Court

By Robert Portillo, Staff Writer

Photo Courtesy of Pixabay

The time has finally come for federal prosecutors to make their case against Sam Bankman-Fried, the eccentric former billionaire CEO of cryptocurrency exchange FTX. A man once touted as crypto’s “golden boy” has procured some new less flattering nicknames in the time since a run on customer deposits in late 2022 forced FTX and its sister hedge fund, Alameda Research, into bankruptcy.[1] The trial began October 3rd in New York’s Southern District.[2] While the jury has not yet reached a verdict,[3] the court of public opinion seems ready and willing to solidify Bankman-Fried’s name among the likes of Madoff and Holmes upon conviction.[4]  

We are currently around the midpoint of Bankman-Fried’s trial, which prosecutors have estimated will take up to six weeks.[5] There have been plenty of fireworks already, including testimony from three cooperating witnesses who have all pled guilty to fraud charges, one of whom also happens to be the former significant other of the defendant.[6] Let’s take a look at what has already been raised by the prosecution, what is still to come from both sides, and what potential outcomes we can expect at the conclusion of the trial.  

Bankman-Fried has been charged with two counts of wire fraud conspiracy, two counts of wire fraud, conspiracy to commit money laundering, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations.[7] The charges are brought on the allegation that Bankman-Fried used billions of dollars of FTX customer funds for personal use, political contributions, and to repay billions of dollars in loans owed by FTX’s sister hedge fund, Alameda Research.[8] If Bankman-Fried were convicted on all eight counts, he could receive a sentence exceeding one hundred years in prison.[9]

The first cooperating witness for the prosecution was Gary Wang, the co-founder of FTX who first met Bankman-Fried at a summer camp in high school and later became his classmate at MIT. [10] While on the stand, prosecutors asked Wang if he committed financial crimes in his time at FTX, which he answered in the affirmative.[11] When asked if he saw anyone in the courtroom with whom he committed those crimes, Wang said “Yes,” and later indicated it was Sam Bankman-Fried.[12] As testimony rolled on, Wang explained to the jury that there was a “bug” in the cryptocurrency exchange’s code that allowed Alameda to make an unlimited number of withdraws from FTX. [13] In early 2020, Wang discovered that Alameda’s negative balance had exceeded FTX’s revenue, a clear indication that Alameda was taking customer funds.[14] This information was brought to the attention of Bankman-Fried on multiple occasions.[15]

The most anticipated witness of the trial was Caroline Ellison, the CEO of Alameda Research and former romantic partner of Bankman-Fried. Ellison told the jury that Bankman-Fried directed her to falsify Alameda’s balance sheets to conceal that the hedge fund had borrowed around $10 Billion in FTX customer funds.[16] She further testified that she and Bankman-Fried brainstormed ways to continue funding the exchange and hedge fund, including the idea of selling a stake in FTX to Saudi Arabian Crown Prince Mohammed bin Salman.[17] Emotions were high during her time on the stand, tearing up more than once while describing her state of mind in the final week of the failed crypto exchange and hedge fund.[18] Ellison stated she was in a “constant state of dread,” in the leadup to the collapse and admitted she felt relieved when the doomed companies finally met their demise.[19]

In the third week of the trial, prosecutors showed jurors a slew of profane messages Bankman-Fried sent to journalists following the collapse of FTX.[20] In those messages, he conveyed his dismay with regulators saying they “make everything worse,” a complete contradiction of the public image Bankman-Fried had cultivated as a proponent of cryptocurrency oversight.[21] When a Vox journalist he was communicating with via Twitter questioned whether his previous statements in favor of regulation were made solely for “PR” Bankman-Fried responded, “yeah just PR.”[22] He later doubled down on that when the journalist said, “you were really good at talking about ethics, for someone who kind of saw it all as a game with winners and losers” to which SBF responded in a string of consecutive messages, “ya” “hehe” “I had to be.”[23]

The defense will have a daunting uphill battle in front of them at the conclusion of the prosecution’s case, which has “turned out to be not only as strong as it was expected to be but, if anything, stronger,” according to former federal prosecutor and Duke University law professor Samuel Buell.[24] The defense has yet to confirm or deny whether Bankman-Fried will take the stand, something many have theorized as a distinct possibility given his willingness to talk to journalists in the immediate aftermath of FTX’s collapse. 






[6] Id.


[8] Id.

[9] Id.


[11] Id.

[12] Id. 

[13] Id. 

[14] Id. 

[15] Id.


[17] Id.




[21] Id. 


[23] Id. 


Comments are closed.