The action-packed third week of Sam Bankman-Fried’s historic fraud trial concluded Thursday afternoon in Manhattan federal court. Here’s what you missed.
The Incriminating Testimonies
The prosecution started with a bang as Nishad Singh delivered a powerful testimony against the now-disgraced FTX founder. Singh testified that customer deposits into FTX were “spent and lost” by sister company, Alameda Research, on “real estate investments, VC investments, campaign donations, and speculative events in trading.” The former head of engineering for FTX went on to say Bankman-Fried spent in “excess,” claiming that the disgraced crypto founder spent nearly $1 billion on promotional deals for the company.
“Bankman-Fried’s lavish lifestyle was widely reported on, with the former ‘king of crypto’ bankrolling a $35 million luxury penthouse for himself and nine other FTX and Alameda Research employees,” Singh revealed.
A Playground for the Elite
The prosecution went on to share an email from Bankman-Fried in early 2022 detailing a Super Bowl party attended by the FTX founder. Thrown by venture capital firm K5 Global, the party featured “the most impressive collection of people,” including former presidential candidate Hillary Clinton, Amazon founder Jeff Bezos, Netflix CEO Ted Sarandos, and supermodel Kendall Jenner. Bankman-Fried went on to call K5 Global a “one-stop shop” for establishing important connections before doling out over $300 million in bonuses to the company’s founders, Michael Kives and Bryan Baum.
Singh further alleged that Bankman-Fried invested around $200 million in a celebrity-run tequila brand, potentially alluding to Jenner’s famous 818 Tequila brand. Testifying under a cooperation agreement with the U.S. government, Singh said Bankman-Fried’s operation “wreaked with excess and flashiness.”
- Singh continued that Bankman-Fried “spent a lot of Alameda’s money with the lawyers effectuating loans through people like me to get them into FTX US or making investments from Alameda Research Ventures.”
- FTX general counsel, Can Sun, claimed he was deceived by Bankman-Fried and fellow FTX executives, only learning the true status of FTX and Alameda’s financial health when it began to collapse.
“It looked like his soul had been plugged away from him,” said Sun, describing Bankman-Fried’s reaction upon discovering the missing funds.
In another pivotal moment in the prosecution’s case, the jury was presented with a number of Twitter direct messages between Bankman-Fried and Vox journalist Kelsey Piper. In them, the two discuss a prior conversation where Piper asks Bankman-Fried if it’s worth it to behave unethically for the greater good. At the time, Bankman-Fried said no, but revealed in the messages that he said a lot of “dumb sh-t” that was “not true.”
“I felt really betrayed that five years of blood, sweat, and tears, from me and so many employees, driving towards something that I thought was a beautiful force for good, had turned out to be so evil,” testified Singh.
The court adjourned early on Thursday, October 19th for a short break in the trial’s schedule and will resume later next week. The prosecution is expected to rest their case on Thursday, October 26th, after presenting three final witnesses, including an FBI agent, an unnamed customer witness, and an unnamed investor witness. The defense has made multiple statements this week suggesting they may choose not to present a case. However, Judge Kaplan insisted that if they go ahead with Bankman-Fried’s defense, they must do so on October 26th.
Bankman-Fried has pleaded not guilty to seven fraud charges and is facing a potential maximum sentence of over 100 years if convicted. It is unclear if he will decide to testify should the defense go forward with their case. Cryptonews.com reporter Julia Smith is on the spot in the court and will be reporting daily on the proceedings.
