He is accused of committing one of the biggest financial frauds in American history by using FTX customer deposits to prop up risky investments in fledgling hedge fund Alameda, which was run by his ex-girlfriend Caroline Ellison.
The jury in the Manhattan federal court was sent out for deliberations by Judge Lewis A. Kaplan about 3.15pm.
Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy. Although he acknowledged making mistakes which led to FTX’s bankruptcy in November 2022 – harming customers and employees – but denied stealing customers’ money.
The 31-year-old one-time billionaire, whose wealth was once estimated to be about $25B by Forbes, could be sentenced to up to 110 years in jail if he is found guilty by the jury.
The high-profile trial began on October 4 and has featured plenty of damaging testimony from a number of Bankman-Fried’s inner circle which turned against him including Ellison, Gary Wang, FTX co-founder, and Nishad Singh, the company’s top engineer.
The fate of FTX founder Sam Bankman-Fried is in the hands of 12 jurors who have been sent out to decide whether he is guilty of $8billion worth of crypto fraud
He is accused of committing one of the biggest financial frauds in American history – by using FTX customer deposits to prop up risky investments in fledgling hedge fund Alameda, which he ran with his ex-girlfriend Caroline Ellison
Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy. He could be sentenced to up to 110 years in jail if he is found guilty by the jury
Prosecutor Nicolas Roos used his closing arguments on Wednesday to tell the jury that Bankman-Fried ‘thought he was smarter and better’ and could get away with taking people’s money.
The assistant US attorney said his testimony on Friday was a lie which ‘had been rehearsed a couple of times’. He claimed he was a different person under cross-examination and could not remember details being asked of him over 140 times.
Prosecutor Roos laid out the questions the jury needed to answer ahead of the conclusion of the trial.
‘As FTX ceased to exist, a series of questions emerged. Where did the money go? What happened? And who is responsible?,’ he said.
‘You know who was responsible. Sam Bankman-Fried. He spent his customers’ money and he lied to them about it.
‘This was a pyramid of deceit built by the defendant on a foundation of lies and false promises, all to get money. Eventually it collapsed, leaving thousands of victims in its wake.’
He added: ‘The answer is clear – he took the money, he knew it was wrong. He did it because he thought he was smarter and better and could walk his way and talk his way out of it. But today, with you, that ends.’
The assistant US attorney pointed to Bankman-Fried’s testimony on Friday and claimed he lied.
‘He didn’t have to testify in this trial. He told a story, and he lied to you,’ he said.
Roos said he was able to perfectly recall what the inside of the Alameda Research offices looked like and the thought process behind renaming NBA team Miami Heat’s arena to incorporate the FTX name.
‘He was a completely different person under cross examination,’ he told the jurors.
‘Suddenly he couldn’t remember a single detail about his companies. It was uncomfortable to hear. It happened over 140 times.
‘He had to be asked and re-asked. He lied about big things and he lied about little things.
‘He told you he didn’t know what was going on and he didn’t realize that what was happening was wrong.’
He added: ‘To believe the defendant, you would have to ignore the testimonies of his partners in crime, including Caroline Ellison. You would have to ignore the documents.
‘You would have to believe the defendant, who graduated from MIT and owned two billion dollar companies, was actually clueless.’
Roos accused Bankman-Fried of ‘celebrity chasing’, showing jurors the famous picture of him at the 2022 Super Bowl with singer Katy Perry.
The high-profile trial began on October 4 and has featured plenty of damaging testimony from a number of Bankman-Fried’s inner circle which turned against him including Ellison, Gary Wang, FTX co-founder, and Nishad Singh, the company’s top engineer
Caroline Ellison, pictured at Manhattan Federal Court in Manhattan, New York City on October 10, said she committed fraud and that Bankman-Fried ‘directed’ her to do it
A number of Bankman-Fried’s inner circle have turned on him and are testifying against him at his trial, including Gary Wang (left) and Nishad Singh (right)
He also showed the court a spreadsheet of Alameda finances illustrating a $13.7billion deficit in September 2022.
Roos pointed to the metadata which showed Bankman-Freed had accessed the spreadsheet as ‘absolute proof’ he knew about the huge financial hole – but claimed he continued to spend hundreds of millions of dollars.
‘He had the arrogance to think he could get away with it,’ Roos said.
He added that while Ellison said she ‘lived in a constant state of terror’ over the hole, the CEO continued to ‘dig deeper rather than come clean’.
Bankman-Fried listened to the closing statement beside his lawyer, typing on a laptop throughout.
His defense attorney Mark Cohen said: ‘The government has sought to turn Sam into some sort of monster. I hope you have seen it’s not true, and it’s not a basis to find verdicts on specific charges.
‘According to the government, everything Sam ever touched and said was fraudulent. Here we heard evidence about Sam’s hair, his clothes and his sex life.
‘The prosecutor gave us a movie opening, with the witnesses and prosecutors pointing at Sam, saying “that man”. Why are they doing this? They are trying to make him into someone we don’t like so we can convict him.’
‘Sam’s appearance and sex life have nothing to do with whether he’s guilty of specific charges.’
Cohen claimed the government did this to present Bankman-Fried as ‘a villain’.
‘Remember that good faith is a complete defence, and the burden of proof to show he did not act in good faith lies with the government,’ he added.
‘You must find beyond reasonable doubt that Sam did not act in good faith and acted knowingly and willingly. This burden of proof is heavy. And it must be a unanimous verdict.
‘Sam believed in good faith that he was dealing with a liquidity issue. He didnt believe it was one of insolvency but liquidity.’
Cohen said that at its peak, FTX International was worth $32billion, and Bankman- Fried did not lie to customers but ‘believed FTX and Alameda were so valuable he could liquidate them to resolve any issues on the exchange if necessary.’
He added that his $30million Bahamas property was a ‘legitimate business expense’ as accommodation and incentive for his employees to ‘uproot their lives and families and move abroad’.
The jury heard from Ellison who said she committed fraud and that Bankman-Fried ‘directed’ her to do it.
She said that she felt ‘indescribably bad’ about FTX collapsing and, breaking down in tears in front of the jury, said the scandal was ‘something I’d been dreading for so long’ she felt relieved when it finally came out.
With no ambiguity in her voice, she told the jury: ‘Alameda took several billion dollars of money from FTX customers and used it for investments and to repay debts we had’.
FTX founder Sam Bankman-Fried sworn in as he testifies in his fraud trial on October 27
Prosecutor Nicolas Roos used his closing arguments to tell the jury that the 31-year-old billionaire ‘thought he was smarter and better’ and could get away with taking people’s money
Prosecutor Roos accused Bankman-Fried of ‘celebrity chasing’, showing jurors the famous picture of him at the 2022 Super Bowl with singer Katy Perry (left) and Orlando Bloom (second from left)
Previous reports have stated that Ellison was paid far less than other top FTX executives, and may not have even known about the pay difference.
Court filings have said that FTX’s founders and other top staff got $3.2 billion in payments and loans.
Singh, FTX’s former head of engineering, told the court how he was ‘embarrassed and ashamed’ of the company’s excessive spending.
He said that it ‘reeked of excess and flashiness’ and it ‘didn’t align with what I thought we were building the company for’.
Singh said that he found out about the ‘enormous’ hole in FTX customer accounts about two months before the company collapsed, and that most of it had gone on Bankman-Fried’s lavish spending.
He claimed to have always been ‘intimidated’ by Bankman-Fried and felt increasingly uncomfortable with the direction he was taking FTX.
During his testimony Singh walked the jury through the $100 million that was spent on political donations, including $5 million to Joe Biden, though he also gave to Republicans too.
The court heard that Bankman-Fried regarded such donations as a good return on his money and a cheap way to gain influence.
Singh told the jury about the $1.1 billion FTX spent on publicity including $205 million to name the FTX arena in Miami.
In his testimony, Wang, the FTX co-founder, described how in 2019, Bankman-Fried told him to set up the special privileges for Alameda which included being able to have a negative balance – it could owe as much as $65 billion – and make ‘unlimited withdrawals’ from FTX.
Wang, who pleaded guilty to fraud and agreed to cooperate with prosecutors, said that even when Alameda didn’t have any money in its account, it could still take money from FTX.
Assistant US Attorney Roos asked: ‘When Alameda Research withdrew money below its zero balance, whose money did it withdraw?’
Wang said: ‘Money belonging to customers of FTX’.
Roos asked if FTX disclosed Alameda’s special privileges to its investors or customers
Wang said no.
On the final day of his testimony in court on Tuesday, the alleged crypto fraudster periodically smirked and frowned in response to questions about the collapse of his bitcoin empire in November 2022 and gave a slew of evasive answers.
He was probed on how much he knew about the $8billion ‘hole’ in his company finances, who was responsible for it, and his ‘cozy’ relationship with Bahamian officials.
Bankman-Fried once again struggled to answer a barrage of questions about who was behind the movement of customer money from FTX to Alameda, and he frequently stole glances at the 12 jurors who will decide his fate.
Nishad Singh (pictured arriving at court with girlfriend Claire Watanabe) testified that the company spent millions on celebrity partnerships in early 2022 – as prosecutors attempted to show how Bankman-Fried squandered customer money to boost his stature
Singh was FTX ‘s former engineering director, and he is among several former members of Bankman-Fried’s inner-circle to testify against him
The FTX exchange was based out of the Bahamas penthouse, which went up for sale in November 2022 after the company filed for bankruptcy
He could face decades behind bars if convicted.
The crypto boss said he doesn’t ‘remember anything about particular employees’ involved in sending the FTX customer deposits to Alameda, and that no-one was fired over the disappearance of $8billion in customer money.
But he also disagreed with prosecutor Danielle Sassoon’s summary of his position being that ‘as CEO of Alameda, some unknown people just spent $8billion without your knowledge’.
Bankman-Fried insisted, ‘that’s not my testimony’ – but didn’t offer an alternative narrative during the cross-examination.
The billionaire conceded that he didn’t pay enough attention to the day-to-day transactions of his companies. ‘I deeply regret not taking a deeper look,’ he told the court.
‘When I was CEO of Alameda, I was concerned with Alameda overall risk management and its overall portfolio,’ Bankman-Fried added.
‘As CEO of FTX I was paying attention – although not nearly as closely as I should have been – to the risk management of Alameda accounts with FTX specifically.’
Crypto’s former golden boy admitted to knowing about the $8billion liability in October 2022, and sharing a tweet the following month to ‘reassure’ FTX customers that their funds were safe.
He also said he remembered ‘liking’ replies from some customers saying they would not withdraw funds.