DoJ takes a tough stance against SBF as trial begins

• The defense argued that SBF acted “in good faith” and made business decisions at FTX that “didn’t work out.”
• The defense also denied any fraud or theft on part of SBF.

The second day of the trial against FTX [FTT] founder Sam Bankman-Fried “SBF” saw both the prosecution and the defense presenting their arguments in the court.

Inner City Press reported on 4 October that once the process of jury selection was over, both the warring sides put forward their opening remarks to the 12-person jury.

The U.S. Department of Justice (DoJ) told the court that SBF lied to customers, investors, and lenders on purpose in order to enrich himself, and build his crypto empire at FTX. He employed Alameda Research as a collaborating partner to “steal customers’ funds” — a phrase iterated by the prosecution during the opening remarks.

In response, SBF’s team defended him as a young entrepreneur who made business decisions that “didn’t work out.” The team also denied the existence of any hidden transactions between FTX and Alameda.

SBF executed all the transactions “in good faith” during the crypto winter in early 2022 and later in November that year when FTX collapsed. In fact, SBF believed FTX could lend funds to Alameda as part of a business arrangement with the market maker, and there was no secret door for transactions between the companies.

The defense team argued,

Sam didn’t defraud anyone. There was no theft… It’s not a crime to be the CEO of a company that files for bankruptcy.

Colleagues’ testimonies “damaging” for SBF?

The defense team also questioned the credibility of the witnesses testifying against SBF as they have a cooperation agreement with the prosecution.

The witnesses in question are former Alameda Research CEO Caroline Ellison, FTX cofounder Gary Wang, and former FTX Director of Engineering Nishad Singh.

Later, two witnesses — a French trader who was a former FTX client, and a former employee at Alameda Research and FTX who was SBF’s friend— also gave their testimonies.

The prosecution used both these testimonies to cement its argument that FTX was positioning itself as a safe crypto trading platform to its users and clients.

FTX was valued at $32 billion in 2022 before it filed for bankruptcy in November.