News - Sam Bankman-Fried makes attempt to prevent witness statements

By Sam Fröling

Sam Bankman-Fried makes attempt to prevent witness statements

FTX
Sam Bankman-Fried, makes attempt to prevent witness statements

Trial Day 1: Even before the start, Sam Bankman-Fried wants to prevent witnesses from testifying. Jury selection begins this week; opening statements follow next week.

Yesterday, Oct. 3, the long-awaited trial of FTX founder Sam Bankman-Fried (SBF) began. But even before it began, the 31-year-old wanted to influence the trial. Sam Bankman-Fried's lawyers objected to demands to use testimony from the prosecution, including customers and investors. The lawyers argue that these requests may be improper and that each witness statement should be considered on a case-by-case basis.

If the court approves the prosecution's request, the defense will have the right to cross-examine the witnesses. In addition, other briefs were filed before the trial began, including a motion to reject remote testimony from an FTX client in Ukraine. Jury selection begins this week, with opening statements to follow next week.

Inside information on relationship between SBF and Alameda CEO

Leading up to the trial, the book "Going Infinite: The Rise and Fall of a New Tycoon" caused a stir. Author Michael Lewis portrayed the fallen crypto billionaire with the curly hair, which was published yesterday, Oct. 3. Which was just in time for the start of the trial. So Bankman-Fried explained in a memo to Alameda CEO Caroline Ellison that he was concerned about their relationship. He highlighted the potential downsides such as PR problems and worried about the balance of power.

On the other hand, he appreciated Ellison's qualities, found her smart and impressive. But Ellison wanted more out of the relationship, while Bankman-Fried hesitated. Uncertainty plagued him; he thought his own feelings and reactions might not be genuine. Ellison sometimes felt hidden by him and felt ashamed of her.

Communication between the two was difficult; Ellison wanted more disclosure. In the current trial, the former Alameda CEO is cooperating with prosecutors and has told everything. She hopes for a reduction in her sentence; she faces decades in prison.

FTX scandal: millions lost for institutional investors

The book on FTX and SBF in the background also talks about the intricacies of Jump Trading. According to Michael Lewis, the crypto market maker lost US$206 million in the FTX scandal. Lewis points to private documents published by FTX's former COO "Constance Wang" as the source of the information.

Also affected by FTX's bankruptcy: Temasek. The Singapore sovereign wealth fund had invested $275 million in FTX and wrote off all investments following the crypto exchange's bankruptcy.

Binance is also among the initial backers. In a December 2019 funding round, the company invested a previously undisclosed amount. The investment offsets FTX. Binance CEO Changpeng Zhao confirmed that he had received just under US$2.1 billion in BUSD and FTT shortly before the collapse. In March 2020, Sino Global Capital will join FTX. However, the exact amount remains unknown.

The current loss to affected retail customers runs into billions. Work has been going on for some time to optimize compensation. It has already been decided to restart FTX but without Sam Bankman-Fried as CEO.

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