Criminal mastermind or hapless dude? A look into Sam Bankman-Fried's trial so far
FTX founder Sam Bankman-Fried leaves the courthouse following his arraignment in New York City on Dec. 22, 2022. Bankman-Fried's trial just concluded its second week, with explosive testimony from former girlfriend Caroline Ellison.
Ed Jones/AFP via Getty Images
The U.S. government says disgraced cryptocurrency mogul Sam Bankman-Fried committed one of the largest financial frauds in history. His defense lawyers, however, argue he was just a young guy who got in over his head.
Two weeks into the high-profile criminal trial of the former CEO of cryptocurrency exchange FTX, jurors have already heard opening arguments as well as testimony from the prosecution's star witness, Caroline Ellison, a former top executive in Bankman-Fried's crypto empire and his ex-girlfriend.
Here are five big takeaways from the trial so far.
Painting Bankman-Fried as a criminal mastermind
Prosecutors have charged Bankman-Fried with seven criminal counts, including defrauding FTX customers and investors.
They argue he funneled FTX customer money into a separate investment firm he controlled — Alameda Research — and used billions of dollars to pay down debts, invest in risky startup companies and finance a luxury lifestyle.
If convicted of all charges, Bankman-Fried could spend the rest of his life in prison.
Central to the government's argument is that Bankman-Fried controlled it all, and the government has secured the cooperation of key members of his inner circle at FTX and Alameda Research.
The jury has already started to hear from them.
Gary Wang, who co-founded both FTX and Alameda Research, said Bankman-Fried directed him to change a few lines of computer code so that funds from FTX customers could be steered to Alameda without their knowledge.
Wang, like other witnesses for the prosecution, said everyone followed Bankman-Fried's instructions.
Prosecutors also introduced documentary evidence, including Slack messages and several audio clips of an all-hands meeting during Alameda Research's final days, which they say support their claim that Bankman-Fried was the one running the show at both companies.
A star witness delivers explosive testimony
Among the prosecution's witnesses, one towers above the rest in her importance to the case: Caroline Ellison, Bankman-Fried's on-again, off-again girlfriend and former head of Alameda Research.
During three days of testimony that got tearful at times, Ellison — like Wang — said it was Bankman-Fried who called the shots.
"He directed me to commit these crimes," she told the court.
Ellison said he asked her to draw on FTX customer funds to pay down Alameda Research's debts, and he told her to manipulate financial documents in "dishonest" ways to mislead investors and the firm's lenders.
Ellison also alleged Bankman-Fried was manipulative. In excerpts from her diary, which the government entered into evidence, Ellison wrote about her personal and professional frustrations in dealing with the former FTX CEO.
At one point, Bankman-Fried criticized her for failing to follow his investment advice, and in a memo he circulated, Bankman-Fried suggested Ellison was a weak leader.
Ellison also detailed how much effort Bankman-Fried put into cultivating a certain persona, seeking to capitalize on what became his signature look — unkempt hair, along with a T-shirt and shorts.
That calculated nonchalance extended beyond the way he dressed, she added.
According to Ellison, when FTX moved its headquarters to the Bahamas, they both initially had luxury cars to drive. But Bankman-Fried didn't like the optics, and he soon switched cars.
"He said he thought it was better for his image to be driving a Toyota Corolla," she said.
Ellison herself started driving a Honda Civic.
But the defense argues Bankman-Fried was overwhelmed
