- A Bloomberg report has indicated important pointers from Sam Bankman-Fried’s court case as trial begins.
- SBF is charged with using stolen customer funds to make millions in political donations, amid other counts of crime.
- Three former members of SBF’s inner circle, Caroline Ellison, Nishad Singh, and Gary Wang are also expected to testify.
- Unlike his usual curls and casual dressing, the former executive presents with a suit and tie while sporting neat haircut.
In what Judge Lewis Kaplan calls “electric quarantine” the jurors have been asked not to talk to anyone either on the news or the internet about the case as the Lower Manhattan Court decides who will sit on the Jury. Sam Bankman-Fried (SBF) sits in court only flanked by his legal representatives, parents absent, neat shaven and in a suit, contrary to his usual casual wear and curly hair.
Also Read: Binance CEO had a vendetta against FTX exchange - new lawsuit alleges; SBF faces first court day
Sam Bankman-Fried trial begins
Today’s session started with the legal heads from the prosecution (comprising the US Attorney's office in Manhattan) and defendant (SBF) jointly selecting a panel of 12 jurors and six alternates, narrowing down from 50.
Opening statements from prosecutors’ desk
Sam Bankman-Fried is on the receiving end of the https://www.fxstreet.com/cryptocurrencies/news/ftx-founder-sam-bankman-fried-trial-to-begin-on-wednesday-while-celsius-ceo-will-face-court-in-2024-202310032024prosecution team, which articulates several key points:
That SBF intentionally committed fraud, lying to customers about their funds’ safety and took billions of dollars from thousands of victims.
Among the prosecutors, Assistant US Attorney Nathan Rehn claimed that SBF took money from the firm at will, to facilitate his luxurious lifestyle, including purchasing tier-one real estate properties and hanging out with celebrities. With these, he allegedly enjoyed “wealth, power, and influence.”
In justification of their claims, the prosecutors reiterated that they had plenty of tangible evidence, including testimonies from three of SBF’s former inner circle, comprising Nishad Singh, Caroline Ellison, and Gary Wang, formerly Director of Engineering, Co-CEO of Alameda Research, and Chief Technology Officer, respectively.
Besides these testimonies, the prosecution intends to use SBF’s own words as evidence against him, including tweets he tried to get rid of and congressional testimony alleged to be false.
SBF lawyers’ rejoinder from the defendant’s desk
Representing Bankman-Fried is Mark Cohen of Cohen & Gresser law firm in New York.He issued a rebuttal, arguing that the volatility that is characteristic of the crypto market has the capacity to overwhelm any growing firm, including FTX.
In Cohen’s words, what SBF went through was a “perfect storm” that became worse once lenders began recalling loans to Alameda during the stark downturn in the crypto market across 2022.
The defense team pointed to Alameda’s former Co-CEO and previous lover for SBF, Ellison, saying she refused to heed to advice from the defendant about hedging Alameda’s crypto bets. With this bone of contention, Cohen established his argument on the basis that SBF’s business practices were “reasonable” considering the circumstances at the time.
Defending that SBF never planned to harm anyone, the lawyer said this was a “hindsight case,” meaning it should be left in the past with lessons learnt from the entire experience.
Despite his stance, Cohen acknowledged the compromising relationship between FTX and its sister hedge fund Alameda. Contradicting previous assertions by SBF and Ellison about the firms operating independently, Cohen revealed that a computer code was in place to allow Alameda to withdraw FTX customer funds at will, a mechanism reportedly established to facilitate proper company functioning.
It is worth mentioning that SBF maintains the “NOT GUILTY” stance, with the option to use inadequacy in risk management to his defense. However, the web is so strong that any argument is likely to be countered by the prosecution in an attempt to attribute the dramatic implosion of the FTX empire to the cooperating witnesses. The three former members of SBF’s inner circle are likely throwing SBF under the bus as they pursue lighter sentences for themselves.
Also Read: FTX founder Sam Bankman-Fried trial to begin on Wednesday, while Celsius CEO will face court in 2024
Cryptocurrency metrics FAQs
What is circulating supply?
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
What is market capitalization?
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
What is trading volume?
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
What is funding rate?
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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