Unchained - SBF Trial, Day 2: DOJ: Sam Bankman-Fried ‘Lied’ His Way to ‘Wealth, Power, and Influence’

Episode Date: October 5, 2023

Laura reports on the opening statements of the prosecution and defense, which painted a portrait of Sam Bankman-Fried as power-hungry and discussed how he allegedly managed to fumble customer funds.  Next witnesses are set to include Matt Huang, cofounder and managing partner at crypto VC firm Paradigm, and Gary Wang, former CTO of FTX.  Tune in to get the latest updates and insights on a case that could have far-reaching implications for the crypto industry. If you need to catch up, don’t miss our recent coverage on the trial: SBF Trial, Day 1: Possible Witnesses Include FTX Insiders, Big Names in Crypto, and SBF’s Family Here’s How Sam Bankman-Fried’s High-Stakes Trial Could Play Out SBF Trial: How Sam Bankman-Fried’s Lawyers Might Try and Win His Case The High-Stakes Trial of Sam Bankman-Fried Begins: What to Expect In the SBF Case, Elite Corruption Is What’s Really on Trial Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi everyone, Laura here. This is the unchained recap for day two, October 4th, of the criminal trial of Sam Bankman-Fried. The U.S. Department of Justice started the criminal trial for Sam Bingman-Fried this Wednesday afternoon by declaring in its opening statement that Bankman-Freed deliberately lied his way toward, quote, wealth, power, and influence, allegedly stealing billions of dollars from thousands of individual people. The defense team for Bankman Freed, on the other hand, described the former FTCS CEO as, quote, a math nerd and a, quote, hard worker who acted in good faith and took reasonable business actions during his time as FTC's founder and CEO. The opening statements from both sides occurred on the second day of the trial, following the finalization of the jury selection process earlier that morning. Bankman Fried's trial also saw testimonies from a former FtX customer and a longtime friend of a jury selection of the jury selection process earlier that morning.

the defendant. Overall, the prosecution's opening statement was cleaner and easier to follow, using simple words such as lied or stole repeatedly, and sentences like, Bankman Freed, quote, was using his company FTCS to commit fraud on a massive scale, and the money he was spending to build his empire. It was money he was stealing from FTC's customers. It even referred to infamous tweets of SBFs that he deleted, as well as testimony to Congress, that contradicted what prosecutors alleged actually occurred at FTX. The defense is opening, which brought up terms like margin loans, collateral, and liquidity was harder to follow, even for someone familiar with crypto and this case.

Chosen jurors included numerous people with professional backgrounds far from finance, such as a retired corrections officer, a train conductor, a social worker, and a nurse. The only juror with a financial background was a retired investment banker with a stand. Stanford MBA. However, Bankman Freed's attorney, Mark Cohen, also had some easier to follow moments in his opening. He called his client Sam and said the government's portrait of him had been, quote, almost a cartoon of a villain. Cohen also used some simpler statements such as, quote, he was a math nerd who didn't drink or party. The first witness called by the prosecution was Mark Antoine Juilliard, an FTCS customer who had lost roughly $150,000 worth of cryptocurrencies and

fiat money he had deposited into or purchased on FTX. He explained the due diligence he conducted before deciding to use FtX and how his research on Bankman Freed led him to have a picture of SBF that was, quote, wanting to do good towards the industry and giving access to customers, retail investors like me. Julia had shared with the courtroom how on November 6th and 7th, the days before FTC's insolvency became public, tweets by SBF, stating that customer assets were safe, assured Juilliard so that he didn't try to withdraw any of his funds. The second person to testify was Adam Yiddhidia, who called himself a close friend of Banking Freeds since their college days at MIT, and who also worked at FTC as a software engineer

at the time of its collapse, and Alameda research as a trader prior to that. Yadidia said he had resigned immediately from FtX upon learning that Alameda, Bankman Freed's crypto trading firm, had used FtX customer deposits to repay Alameda loans. Just before the trial closed for the day, Yadidia acknowledged he had been living with nine roommates, one of whom was SPF in a luxurious penthouse in the Bahamas worth about $35 million. The 31-year-old Bankman Freed currently faces seven felony charges, ranging from wire fraud, to conspiracy to commit money laundering. The trial will resume tomorrow at 9.30 a.m. Eastern Time

with a continuation of Yadiddea's testimony. The government then stated that its next witnesses this week will likely include Matt Huang, co-founder and managing partner at Paradigm and Gary Wong, former CTO of FTX. Unchained will be back with more updates tomorrow.