The high-stakes crypto fraud trial of Sam Bankman-Fried is nearing its conclusion, as closing arguments were presented on Wednesday in a Manhattan federal court.
The prosecution has spanned several weeks and has provided insights into the collapse of FTX, a cryptocurrency exchange, as well as the broader complexities within the digital currency markets.
The prosecution wasted no time portraying Sam Bankman-Fried as an unscrupulous fraudster, contrasting the defense’s portrayal of him as a wayward math nerd.
They argued that Bankman-Fried had constructed a “pyramid of deceit” through his cryptocurrency exchange, FTX, ultimately bankrupting it.
Sam Bankman-Fried Trial
Assistant US attorney Nicholas Roos leveraged Bankman-Fried’s testimony to support their case.
They contended that FTX was on the brink of bankruptcy, with billions of dollars from thousands of customers disappearing.
Roos accused Bankman-Fried of spending his customers’ money and lying about it.
Roos began his closing argument by describing the final days of FTX in November of the previous year when it experienced a crypto equivalent of a bank run.
The revelation that Alameda Research, FTX’s sister hedge fund, held billions in FTX’s cryptocurrency, FTT, as collateral for significant loans triggered the crisis.
Binance’s CEO, Changpeng Zhao, publicly announced the unloading of $500 million in FTT holdings, resulting in FTT’s rapid decline and FTX’s collapse.
With each passing day, the volume of withdrawal requests increased, causing widespread anxiety and despair among thousands of customers.
Bankman-Fried faces seven conspiracy and fraud charges, accused of diverting FTX customer funds into Alameda to cover its mounting debt following the crypto crash in spring 2022.
In response to these allegations, Bankman-Fried’s lawyer, Mark Cohen, argued that the prosecution had focused excessively on Bankman-Fried’s appearance rather than the substance of his actions.
He contended that Bankman-Fried acted in good faith and that his appearance and personal life were irrelevant to the charges against him.
Cohen asserted that Bankman-Fried’s testimony before lawmakers demonstrated that he was not a cunning criminal, highlighting the risk Bankman-Fried took by testifying in his defense.
He argued that the government had tried to vilify Bankman-Fried by focusing on his appearance and personal life rather than the case’s merits.
The prosecution maintained that Bankman-Fried used technological subterfuge to cheat customers, treating their money as his “personal piggy bank.”
They claimed he set up a system favoring Alameda, which could borrow and exchange customer funds, accumulating debt on a massive line of credit, unlike other customers.
The trial has drawn attention to the broader issues surrounding digital currency markets and the challenges of regulating this rapidly evolving space.
A verdict in the case will be eagerly awaited by the cryptocurrency industry and beyond.
Source: The Guardian