FTX founder Sam Bankman-Fried leaves the Manhattan federal court, in New York, on March 30.AMANDA PEROBELLI/Reuters
FTX founder Sam Bankman-Fried’s defence lawyer told jurors on Wednesday that prosecutors in his fraud trial sought to portray him as a “villain” and a “monster” because they could not prove he stole billions of dollars from the cryptocurrency exchange’s customers.
Lawyer Mark Cohen began his closing arguments in Mr. Bankman-Fried’s trial in Manhattan federal court after the prosecution made its arguments to the 12 jurors for conviction. Prosecutors have accused Mr. Bankman-Fried, 31, of stealing US$8-billion in one of the biggest financial frauds in U.S. history.
Mr. Cohen said prosecutors elicited testimony about Mr. Bankman-Fried’s sex life and appearance – the former billionaire was known for his unkempt mop of curly locks and wearing shorts and T-shirts – to try to get the jury to dislike him.
“Every movie needs a villain,” Mr. Cohen said. “And let’s face it, an awkward high-school math nerd doesn’t look particularly villainous. So what did they do? They wrote him into the movie as a villain.”
“Time and again, the government has sought to turn Sam into some sort of villain, some sort of monster,” Mr. Cohen added.
Closing arguments have lasted several hours, and jurors are not expected to get the case before Thursday to begin deliberations. Mr. Bankman-Fried may learn his fate just shy of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and wiped out what had been his estimated US$26-billion fortune.
In his closing argument, prosecutor Nicolas Roos earlier told jurors that Mr. Bankman-Fried simply stole people’s money.
“This was a pyramid of deceit built by the defendant on a foundation of lies and false promises, all to get money,” Mr. Roos said. “Eventually it collapsed, leaving thousands of victims in its wake.”
The defence rested its case on Tuesday after Mr. Bankman-Fried underwent a second day of tough cross-examination by the prosecution – the risk he ran by opting to testify in this own defence. Mr. Bankman-Fried, who pleaded not guilty to two counts of fraud and five counts of conspiracy, tried over three days of testimony to convince the 12 jurors of his innocence.
In all, the jury heard 15 days of testimony. Three of Mr. Bankman-Fried’s former close confidantes, testifying for the prosecution after entering guilty pleas, said he directed them to commit financial crimes, including helping his crypto-focused Alameda Research hedge fund siphon FTX customer deposits and lying to lenders and investors about the finances of the two companies.
Mr. Roos told jurors that there is no question that Alameda used billions of dollars of customer money to pay off Alameda’s lenders and to lend money to FTX executives so they could make speculative investments and donate to U.S. political candidates.
Rather, Mr. Roos said, the main disputes in the case are over what Mr. Bankman-Fried knew about where customer money went and whether it was wrong. Mr. Roos he urged jurors not to buy the argument that Mr. Bankman-Fried’s companies collapsed owing to poor business decisions such as Alameda’s failure to hedge its bets.
“The defendant was gambling with customer money,” Mr. Roos said. “When he took the money, and he played roulette with it, he was stealing.”
Under questioning from Mr. Cohen, Mr. Bankman-Fried portrayed himself as a busy chief executive officer who left operational nuts and bolts to subordinates. He made mistakes that harmed customers and employees, Mr. Bankman-Fried admitted, but never defrauded anyone or stole money.
Mr. Roos countered that Mr. Bankman-Fried’s digital fingerprints showed he had looked at a document as far back as June, 2022, showing that Alameda had a large negative balance on FTX, as well as a spreadsheet Alameda’s CEO, Caroline Ellison – a prosecution witness – planned to send to lenders that hid its debts to FTX.
“As a result of sending out those fake balance sheets they got new loans,” Mr. Roos said, adding that the financial statement hid the “crime-y, fraud-y parts” of Alameda’s balances.
Mr. Bankman-Fried could face decades in prison if convicted on all counts. He has been jailed since August after U.S. District Justice Lewis Kaplan revoked his bail, having concluded he likely tampered with witnesses.