The trial of Sam Bankman-Fried, the disgraced founder of FTX and former crypto billionaire, has begun.
Federal prosecutors accuse him of masterminding one of the most significant financial frauds in U.S. history. Bankman-Fried, once celebrated as a crypto billionaire, is alleged to have committed wire fraud, securities fraud, and money laundering while CEO of FTX.
The case has been described by Damian Williams, U.S. Attorney for the Southern District of New York, as "one of the biggest financial frauds in American history." Bankman-Fried's trial could potentially last up to six weeks.
This post will be regularly updated throughout the trial.
Tuesday, October 31
Friday, October 27
Sam Bankman-Fried continued his testimony on Monday, with the answers largely revolving around his actions and statements related to the collapse of the FTX crypto exchange and its sister company, Alameda Research.
Defense counsel Mark Cohen led the questioning of his client, while U.S. Assistant Attorney Danielle Sassoon spearheaded the government's cross-examination.
Among other things, Sassoon referred to Bankman-Fried's claims of acting in "good faith" to promote FTX as a safe and transparent exchange, questioning his ability to persuade investors and customers.
She also highlighted multiple instances where Bankman-Fried stated that Alameda Research and FTX were separate entities, with no special privileges for Alameda.
Bankman-Fried appeared to have difficulty recalling the exact phrasing of these statements though.
"Do you recall saying FTX and Alameda acted separately?" Sassoon asked.
“I’m not sure about the exact phrasing," SBF replied.
Going further, Sassoon questioned whether Alameda could withdraw large sums from the FTX exchange without being subject to auto liquidation, to which Bankman-Fried didn't deny the possibility.
The U.S. Assistant Attorney also presented various documents and audio clips from Bankman-Fried's past interviews to argue that Alameda received special treatment and that Bankman-Fried concealed this information from the public.
Bankman-Fried often responded vaguely, claiming he did not recall conversations or statements he made.
The judge, Lewis Kaplan, intervened at times, instructing Bankman-Fried to provide straightforward yes or no answers.
Sassoon is expected to conclude her cross-examination on Tuesday before the defense will have its say on the matter.
An exit plan 🛫 (5:39 p.m. ET)
Sam Bankman-Fried's lead lawyer Mark Cohen was in the driver's seat on Friday, with an opportunity to ask his client questions before the government got its chance. Spanning a plethora of topics raised during the government's case, the defense lawyers questions stretched the entire day.
Bankman-Fried won't face scrutiny from government prosecutors on cross-examination until at least Monday afternoon, Cohen indicated to Kaplan before court was adjourned. Of the information Cohen elicited from Bankman-Fried, the former crypto mogul said he planned to sell his exchange to a firm like Binance when FTX began.
SBF says he didn't defraud anyone 🙅♂️ (9:57 a.m. ET)
In the opening minutes of his testimony—this time before the jury—Sam Bankman-Fried says he did not defraud anyone. Per tweets from Inner City Press's Matthew Lee, one of the few journalists allowed access to his phone in the courtroom, the defense then asked Bankman-Fried about why he started Alameda Research.
His rationale: Because crypto was starting to catch on with the public. And the name? Because the team wanted to stay under the radar.
Cohen: Did it work out that way? SBF: No. FTX declared bankruptcy A lot of people got hurt. Cohen: Did you defraud anyone? SBF: No.
Sam Bankman-Fried did take the stand as expected today—but only after U.S. District Judge Lewis Kaplan sent the jury home, promising them that the end was in sight. The point of the special hearing was to give Kaplan a chance to preview what Bankman-Fried might say—to determine if he could actually say them in open court.
Frustrated by the defendant’s verbose remarks, Kaplan noted that Bankman-Fried had an “interesting way of responding to questions.”
Without further ado 👁️ (8:12 a.m. ET)
In the ongoing courtroom drama surrounding the criminal trial of Sam Bankman-Fried, the disgraced founder of FTX has decided to take the stand to defend himself against fraud and conspiracy charges.
Sam Bankman-Fried is expected to testify today.
This means federal prosecutors will be given the opportunity to present evidence that could undermine SBF’s credibility—something they might not have been able to do if he'd chosen to remain silent. During cross-examination, SBF could face hours of scrutiny, as the prosecution attempts to poke holes in his version of events.
SBF’s defense has meanwhile hinted at the key areas they plan to explore during his testimony. These include a motion to elicit testimony on SBF’s knowledge of certain industry practices, such as his “intentions and beliefs” on the day of the FTX collapse in November 2022.
The hope here is “to rebut the inferences from Gary Wang’s testimony that Mr. Bankman-Fried directed the transfer of assets to Bahamian regulators on that date, over the objections of FTX’s in-house and outside legal counsel, in an effort to retain control of FTX.”
Another area of inquiry will revolve around Bankman-Fried's awareness of lawyers' involvement in structuring and documenting loans made from Alameda to FTX executives.
“Mr. Bankman-Fried’s knowledge that lawyers were involved in structuring and documenting the loans would be probative of his good faith belief that there was nothing inappropriate about the loans,” reads the letter.
'He's going to get skinned alive'
Some industry experts, however, are skeptical of SBF’s chances to convince the court of his innocence.
"He's going to get skinned alive," Skybridge's Anthony Scaramucci said in an interview with CNBC’s “Last Call” on Wednesday.
"There's no way to escape. He's going to think he's going to outfox the prosecutors, but they're very well experienced with this stuff," he said.
Tuesday, October 17
Eye see you 👁️ (9:55 a.m. ET)
As the SBF trial moves into its third week, Nishad Singh, former head of engineering at FTX and Alameda Research, is being cross-examined by SBF attorney Mark Cohen. But as has been true for most of the trial, Judge Lewis Kaplan seems to have little patience for the way Cohen's pacing.
SBF's Cohen: Yesterday you spoke about the Super Bowl dinner at K5's Michael Kives [he pronounces it Key-vays] Singh: Yes and sorry for my pronunciation yesterday. [Note: Cohen seems to have mispronounced his client's so-called GOP face Salame, too] pic.twitter.com/1OqFr08Z2I
Attorneys for Sam Bankman-Fried submitted a court filing on Sunday asking the judge to grant their client permission to take his prescription attention-deficit hyperactivity disorder (ADHD) Adderall medication at midday while in the courthouse.
His legal team reasoned that access to his prescription could influence his decision to testify.
"Mr. Bankman-Fried has been doing his best to remain focused during the trial for the past two weeks, despite not having his prescribed dose of Adderall during trial hours," the letter read. "However, as we approach the defense case and the critical decision of whether Mr. Bankman-Fried will testify, the defense has a growing concern that because of Mr. Bankman-Fried's lack of access to Adderall he has not been able to concentrate at the level he ordinarily would."
Friday, October 13
All-hands on deck 📼 (8:45am ET)
In the ongoing trial of FTX founder Sam Bankman-Fried, his one time top deputy and the former CEO of Alameda Research Caroline Ellison took the witness stand again on Thursday.
She said that “due to a combination of factors” she had considered resigning from her position several times during her tenure, but was convinced to stay by Bankman-Fried.
Ellison also revealed that she had found new love at work, with her boyfriend—who also worked at Alameda and FTX—being present during the FBI’s search of her parents' house on November 16, 2022.
Thursday’s proceedings also featured the testimony of Christian Drappi, a former Alameda software engineer.
Drappi, who joined Alameda in May 2021, expressed his shock upon discovering that Alameda had been covertly diverting FTX customer funds to repay lenders and make illiquid venture investments.
Additionally, audio clips from Ellison's all-hands meeting with Alameda employees on November 9, 2022 were played in court, in which she admitted to the alleged misuse of funds.
The recording of the meeting was secretly made by a trader who had joined Alameda just three days prior and was later shared with Drappi.
Drappi himself admitted to being "utterly stunned" to learn FTX customer funds were used to repay Alameda's lenders, prompting him to resign within 24 hours of the meeting.
The day was capped off with a brief testimony from Zac Prince, the founder of crypto lending firm BlockFi. The company, now bankrupt, had extended loans worth hundreds of millions of dollars to Alameda and held cryptocurrencies on the FTX exchange.
According to Prince, BlockFi was forced into bankruptcy as a result of FTX and Alameda's collapse, with the latter owing the firm $650 million by the time of its bankruptcy—“the outstanding balance that to date has still not been paid.”
Thursday, October 12
YOLO 🙃 (4:30 p.m. ET)
Christian Drappi, a former software engineer at Alameda, was called to testify following the government's star witness, former Alameda CEO Caroline Ellison. Last November, Drappi was present in Hong Kong when Ellison told Alameda employees about shutting down the trading desk during an all-hands meeting. He said he recalled being "utterly stunned" to learn FTX customer funds were used to repay Alameda's lenders.
"I'm sure this wasn't just a YOLO thing," he asked her during the meeting, trying to ascertain whether deliberate meetings or decisions had led to the alleged misuse of FTX customer funds.
In total, he spent less than an hour on the stand. Still, his testimony offered insight into Ellison's last moments with some Alameda employees. Drappi said he resigned from the trading firm less than a day later.
Of note, the conversation between Ellison and employees was recorded by a trader named Richard Best, who had joined Alameda just three days before.
The government only had a handful of minutes to talk to Zac Prince, founder and CEO of crypto lending platform BlockFi, before the day was adjourned. Prince said that Alameda owed BlockFi $650 million when the trading firm went bust, which "still has not been paid."
"Can we approach?" 👨⚖️ (11:00 a.m. ET)
Bankman-Fried's defense asked to speak at sidebar three separate times, with Judge Kaplan becoming visibly and increasingly frustrated, Decrypt's André Beganski reports.
"Let's try to reduce these sidebars," the judge said.
Legal observers have noted that SBF's defense has had a rough start, but it may be playing a long game. Read more about what that legal strategy might entail below 👇
Caroline Was Bearish on Solana 🐻 (9:49 a.m. ET)
SBF's Cohen: You thought FTX was a bad idea, right? Ellison: That's right Cohen: What was Solana? Ellison: A blockchain Cohen: And you didn't share Sam's enthusiasm about it? Ellison: I did not Cohen: You and Sam had different ways of reacting to stress? A: We did
Caroline Ellison—the government's star witness in its trial against Sam Bankman-Fried—is expected to take the stand again on Thursday.
Since Tuesday, the former Alameda Research CEO has been providing details of her involvement in a multibillion-dollar fraud that prosecutors allege was orchestrated by Bankman-Fried at the now-defunct FTX cryptocurrency exchange.
On her second day of testifying against Bankman-Fried, Ellison described how they manipulated Alameda's balance sheets, discussed potential bribes to Chinese officials, and even revealed that FTX tried to recover frozen funds from Alameda Research by using accounts registered to Thai sex workers.
Ellison, who has earlier pleaded guilty to fraud charges, also revealed that she made changes to Alameda’s balance sheet after SBF instructed her to come up with “alternative ways” of presenting the information that, among others, had to be shared with crypto lending company Genesis.
“I didn't want [Genesis] to recall the rest of our loans. I was also worried that they would share the information with other people in the crypto markets and that might cause more widespread concern about Alameda and could even cause people to start withdrawing their money from FTX,” said Ellison on Wednesday.
SBF’s attorney Mark Cohen briefly questioned Ellison on Wednesday before the day was wrapped up and is expected to continue cross-examining the former Alameda Research CEO.
'FTT will go up' (3:12 a.m. ET)
As the trial continues, federal prosecutors have unveiled more screenshots of internal FTX conversations from the days leading up to the crypto exchange filing for bankruptcy. In this latest, Caroline Ellison proclaims that exchange utility token FTT will "go up" if she sends a tweet promising to buy Binance's stash for $22 per token.
Star witness Caroline Ellison was overcome with emotion as she testified about her state of mind as FTX and Alameda Research came crashing down. She told the court she was relieved that she "no longer had to worry about what would happen to people that would be hurt." In a text thread read in court, she confided to disgraced FTX CEO Sam Bankman-Fried that she was in the "best mood" in a long time. “Wow … uh … congrats … because shit’s exciting?” Bankman-Fried responded.
When testimony about Alameda fund flows started to get lost in the weeds, Judge Lewis Kaplan called it a day about half an hour early. Trial resumes tomorrow.
Thailand takeovers 🧊 (11:56 a.m. ET)
The already explosive allegation that Sam Bankman-Fried bribed Chinese officials to have $1 billion sitting on OKX and Huobi crypto exchanges got even more incendiary when Caroline Ellison mentioned that one of ways the Alameda Research and FTX teams tried to retrieve their funds was by opening accounts in the names of Thai prositutes.
But first, the direct 🤖 (9:41 a.m. ET)
OpenAI competitor Anthropic continues to make appearances throughout the Bankman-Fried trial. Initially, the prosecution sought to exclude any mention of Bankman-Fried's $500 million investment in the AI firm, suggesting that reference to the investment—and indications said investment have enjoyed a hefty rise—would be "wholly irrelevant" to the case.
Importantly, Caroline Ellison, who took the stand in dramatic fashion yesterday, also nabbed a stake in Anthropic, drawing more interest in the valuation of the duo's investments.
Per yesterday's filing, the defense claimed that interrogating Ellison about the Anthropic investment reflects "important context" revolving around her "expected value analyses."
Another late Tuesday filing also highlights alleged internal practices in which Bankman-Fried, via legal counsel, established auto-deletion policies on Signal and Slack.
Tuesday, October 10
Pillow talk: POTUS 🇺🇸 (2:09 p.m. ET)
Former Alameda Research co-CEO Caroline Ellison said that while she and SBF were dating on and off during the summer of 2020, he confided in her that he aspired to be President of the United States. Adds a bit of context to his enthusiasm for lobbying in D.C., having an office near the White House, and millions in campaign donations.
Ellison: We started sleeping together on and off in the summer of 2020. We dated and broke up. AUSA: What did the defendant tell you about his ambitions? Ellison: That he would be President. AUSA: Of what? Ellison: The United States.
Ellison: Alameda took several billions of dollars from FTX customers 💰
"He directed me to commit these crimes," Ex-Alameda Research CEO Caroline Ellison said in her brief 15 minute appearance before the trial broke for lunch on Tuesday. "Alameda took several billions of dollars from FTX customers and used it for investments," she said.
She went on to say that Alameda tool $14 billion worth of FTX customer funds total, using $10 billion worth of the money to repay its lenders. Ellison said the firm was able to repay a portion of the funds it took from FTX.
Add to cart? 👗 (11:53 a.m. ET)
An eagle-eyed Twitter user breaks down Caroline Ellison's courthouse outfit.
During the continuation of the defense's cross-examination of FTX founder Gary Wang, SBF lawyer Christian Everdell asked if a tweet from Binance CEO Changpeng Zhao caused a "run on the bank at FTX?" Or at least, he tried to characterize that way. Judge Lewis Kaplan allowed an objection from the prosecution, leaving Everdell to retrace his steps.
Everdell seemed to be referring to Zhao saying that Binance would liquidate its entire FTT exchange token position in a now-infamous tweet on November 6.
Everdell: So CZ's tweet caused a run on the bank at FTX? AUSA: Objection! Judge Kaplan: Sustained. Everdell: CZ's tweet had an effect? Wang: I'm not sure it was that or the leaked financials. Everdell: How much was withdrawn on Nov 6? Judge: What are you asking?
After yesterday's brief pause, today's session will bring Caroline Ellison to the stand.
Ellison, Bankman-Fried's former girlfriend, was the former CEO of the sister hedge fund to the collapsed exchange Alameda Research and is expected to provide key insight into how both organizations were run.
She, like FTX co-founder Gary Wang, has long been cooperating with authorities since December last year.
Ellison's cross-examination will see the defense and prosecution pit narratives of her exact role at Alameda. Thane Rehn, an assistant U.S. attorney for the Southern District of New York, said during the trial's opening remarks that she was "a front" to Bankman-Fried, and in reality "he was still calling the shots at Alameda."
It should be noted that prior to founding the FTX exchange, Bankman-Fried also founded Alameda and continued to hold a large stake in the firm after announcing he would step back from leadership.
As for Mark Cohen, Bankman-Fried's defense, he paints a much different picture of Ellison, one in which Bankman-Fried "relied on her and he trusted her to act as the CEO and manage the day-to-day of trading management, preparing financial documents, handling lender relationships, and he stayed involved as owners do."
Monday, October 9
Couple odds and ends from Wang's testimony on Friday and a court filing on Sunday, October 8.
The former bit of news revolves around FTX's insurance fund, or rather, how the figures for that fund were generated.
Wang reportedly explained that there was a simple bit of code on the exchange which multiplied FTX's trading volume for the day by 7,500 and then divided that figure by a billion. When the prosecution asked if this was a fake number, the FTX co-founder said "yes."
Sunday court filing outlined the prosecution's request to exclude any evidence of Bankman-Fried's investment in the buzzy AI firm Anthropic. Having invested $500 million back in April 2022, that figure may have grown some given Anthropic's increased valuation.
Consequently, this could lead to an increase in the potential recovery for FTX customers and other creditors involved in the FTX bankruptcy.
However, “there is no relevant purpose to admit evidence about the current value of the Anthropic investment,” according to the DOJ.
Friday, October 6
Next up: More from Gary Wang, then BlockFi CEO (9:41 a.m. ET)
The jury has been seated. Starting the day with more testimony from FTX and Alameda Research co-founder Gary Wang, who began his testimony yesterday by declaring that he, Bankman-Fried, and their inner circle committed fraud by allowing Alameda to "withdraw unlimited funds."
Meanwhile, we've also gotten more looks at what life was like in the condo that FTX execs shared in the Bahamas.
Prosecutors said yesterday that after Wang's testimony concludes, they plan to put former BlockFi CEO Zac Prince on the stand. Prince accepted a bailout line of credit from Alameda Research after the crypto lender was hit hard by the collapse of hedge fund Three Arrows Capital and Celsius Network. Since BlockFi filed for bankruptcy, it's been revealed in court documents that Prince told management to "get comfortable" with how shaky Alameda's balance sheet was.
Gary Wang testifies 🗣️ SBF knowingly committed crimes (3:50 p.m. ET)
FTX and Alameda Research co-founder Gary Wang testified today that fellow co-founder and childhood friend Sam Bankman-Fried allowed the crypto trading desk to "withdraw unlimited funds" from FTX. Alameda is at the center of the FTX controversy. Prosecutors allege that Alameda had access to FTX customer deposits and bilked the exchange's clients for billions.
Wang has pleaded guilty to wire fraud and three conspiracy charges—wire, securities, and commodities fraud—and agreed to cooperate with federal investigators.
The $8 billion bug 🐛 (11:40 a.m. ET)
A bug in FTX's code led to an $8 billion overstatement of the money that Alameda Research owed FTX customers, Adam Yedidia told the court on Thursday.
According to Yedida's testimony, in June 2022 he had just been tasked with fixing a bug responsible for saying Alameda owed $16 billion. But after it was fixed, it then accurately showed that Alameda still owed $8 billion. The DOJ pressed him for details about a conversation he had with SBF about it.
After telling Bankman-Fried he was concerned, Yedida said the FTX founder looked nervous as he said that it would take anywhere from six months to three years before the company was "bullet proof" again.
AUSA: And were where you? Yedidia: In that little hut between the two courts. [The "hut" has not walls] Yedidia: I asked, How long until we're bullet proof again? AUSA: What did he say? Yedidia: Six months to three years. He looked nervous.
As the trial kicks off on Day 3, the prosecution resumes testimony from Adam Yedidia, a close friend of SBF's. The two met while in undergrad at MIT. He later did a brief stint as a trader at Alameda Research and then worked at FTX in 2021 as a software developer. But it didn't last.
"I was concerned that as a developer at FTX I may have unwittingly written code that contributed to the commission of a crime," Yedidia said on the witness stand yesterday. He resigned from the company in November 2022 and has been granted immunity by the DOJ in exchange for his testimony.
Today he's helping prosecutors describe what life was like working at the company in the Bahamas and, for a while, being a roommate of Sam Bankman-Fried's. One of their pieces of evidence is a photo showing off a wet bar in the $35 million Bahamas condo where SBF lived with eight friends and FTX employees.
A late court filing on Wednesday emerged Thursday morning indicating that the Department of Justice is seeking to seize two private jets used by Sam Bankman-Fried.
The two planes have been identified as the Bombadier Global 500, or the Bombadier Global Express, and an Embraer Legacy 600.
"The government has taken the position that both aircraft are subject to forfeiture as property purchased with the proceeds of fraud," reads the filing.
While court was on recess for lunch, crypto influencer Tiffany Fong and so-called "pharma bro" Martin Shkreli took a selfie and engaged in some elite-level trolling.
Fong was famously one of the first journalists to release a lengthy phone interview with SBF after FTX collapsed, reconnected with him while he was under house arrest, and eventually visited him in his parents' Palo Alto home. The grumbling about her level of access while not being affiliated with a mainstream news publication lead the New York Post and Daily Mail to deduce that she must have been sleeping with SBF.
Meanwhile, Shkreli was half of the couple being examined in a 2020 Elle feature: The Journalist and the Pharma Bro." That's because in July 2018 Bloomberg News reporter Christie Smythe quit her job covering white collar crime, moved out of her apartment, divorced her husband, and began dating Shkreli—all while he was still serving his 7-year prison sentence. He was released early last year, but a key quote of Smythe's from the profile stuck: "Maybe I was being charmed by a master manipulator."
He's rumored to have broken up with her through his lawyers after she went public about their relationship in the same profile where she mused that he may have manipulated her.
Now, it turns the SBF trial provided the perfect opportunity for Fong and Shkreli to thumb their noses at all of it.
DOJ says SBF stole billions; defense says transfers to Alameda were loans (1:30 p.m. ET)
In its opening statement to the court, the Department of Justice alleged that Sam Bankman-Fried knew he was stealing billions from customers, lied publicly to cover his tracks, and confided in his inner circle—many of whom are expected to testify—about doing so.
Meanwhile, SBF's defense attorneys argued that the loans made to Alameda Research were not done secretively, he acted in good faith, and that Binance CEO Changpeng Zhao's tweets about the FTT token were an attack that caused FTX to collapse.
The jury has been selected (11:30 a.m. ET)
After saying he hoped to wrap up jury selection this morning, Judge Lewis Kaplan made good on that by confirming the 12 jurors who will decide SBF's fate.
There's 110 years of jail time facing 31-year-old Sam Bankman-Fried if he's convicted. Here's a super simple summary of how it all happened from when he founded Alameda Research in 2017 to the reasons he's now on trial.
And for extra credit: An exchange token, like FTT, was pivotal in FTX's meltdown. FTX isn't the only crypto exchange that issued them. Here's what you need to know about how and why they're used.
DOJ says no regs isn't an excuse (1 a.m. ET)
Early in the morning on Wednesday, the U.S. Department of Justice (DOJ) filed a formal letter to Judge Lewis Kaplan, to clarify that a lack of clear crypto regulations in the U.S. is not an acceptable defense for the charges against FTX founder Sam Bankman-Fried. SBF has argued that he adhered to regulations—however sparse or unclear—since FTX was not governed in the U.S.
The letter emphasizes that the absence of specific regulations doesn't justify the alleged misappropriation of funds. "The funds were in fact misappropriated," the DOJ writes.
The case continues to unfold as jury selection concludes and both parties present their opening arguments in the Southern District of New York in Manhattan.
Tuesday, October 3
Late night trial commentary—and book touring
"The alleged crime kind of makes no sense."
—Author Michael Lewis
During an interview on All In with Chris Hayes last night, author Michael Lewis took aim at the allegations against Bankman-Fried. No big surprise there.
Author Michael Lewis joins @chrislhayes to discuss “Going Infinite,” a new book about indicted crypto executive Sam Bankman-Fried.
The American author ("The Big Short," "Moneyball," and "Flash Boys") spent 6 months embedded with SBF in preparation for his new book about the disgraded crypto mogul: "Going Infinite." Last night's comments track with what he's already been getting panned for by the crypto community. Earlier this week, during an interview with CBS' 60 Minutes, he said FTX was a "great real business."
Potential jurors who lost money in crypto released
Several people were dismissed from the potential jury pool after voir dire questioning revealed that they had invested in cryptocurrency and ended up losing money. The pool also included people who worked for banks (including crypto-entangled Silvergate Bank), financial regulators, and investment firms. Judge Lewis Kaplan even quizzed some candidates on whether they watched Sunday's episode of 60 Minutes on CBS, which featured a largely positive take on Sam Bankman-Fried.
One juror tried to say he didn't understand cryptocurrency. Judge Kaplan told him, "You probably have a lot of company in this courtroom."
Court adjourns, no jury selected
The court has adjourned for the day, and while the jury pool has been whittled down considerably, a final jury has yet to be selected. The selection process will continue tomorrow and likely conclude before the mid-day recess.
Amid questions for jurors to weigh their impartiality or potential biases, prosecutors today revealed names of previously unmentioned, yet important players in the FTX drama who may be called to testify or be mentioned at trial. Among them were former Alameda CEO Sam Trabucco, who hasn't been heard from publicly since he stepped down from the company in August 2022.
SBF sues FTX's insurance company
Yesterday, before his trial started, SBF's lawyers filed a lawsuit against Continental Casualty Company (CNA), an excess insurer under a directors and officers insurance policy for Paper Bird Inc. and related companies—which includes FTX. The policy explicitly requires CNA to pay defense costs incurred by the insureds, including Bankman-Fried.
Source: An excerpt from Sam Bankman-Fried's lawsuit against Continental Casualty Company alleged breach of contract.
Bankman-Fried alleges in his lawsuit that CNA has refused to comply with its contractual mandate to pay his defense costs, despite multiple requests. The company is liable for up to $5 million worth of his legal fees now that $10 million worth of coverage has been exhausted.
The policy itself was signed and made effective in August 2022, a few months before the FTX founder stepped down and the company filed for bankruptcy.
Judge Lewis Kaplan addresses potential jurors
Just after 11 a.m. ET Judge Lewis Kaplan asked potential jurors if there was anything about the nature of Bankman-Fried's case that would make it difficult for them to be fair. At least 10 people raised their hands and were excused, Decrypt's André Beganksi reports.
One juror stated he had heard of Bankman-Fried from the Joe Rogan podcast.
SBF is in the courtroom, no plea deal on the table
Jurors entered the room just after 9 a.m. ET. The prosecution stated that there have been no plea offers extended to Bankman-Fried, which the FTX founder's attorney then confirmed.
Source:
Assistant US Attorney Nick Roos: We raised the issue early if there should be plea discussions. The answer was no, so there have been no plea offers Judge Kaplan: Is that accurate, Mr. Cohen? SBF's lawyer Cohen: Yes, your Honor. Judge Kaplan: My question are typed
Although not yet discussed in court, an early-morning filing from SBF's team seeks to stop the DOJ from calling FTX customers as witnesses during the ex-CEO of the now-defunct crypto exchange. Bankman-Fried's lawyers argue that victims who lost money when the exchange filed for bankruptcy might critically misunderstand the relationship they had with the exchange and therefore bias the jury against SBF.
"The subjective perspective of the victim is not the appropriate yardstick for measuring materiality," his legal team wrote, "particularly where the witness’s own view of the legal relationship with a commercial counterparty may be mistaken."
Jury selection
On Tuesday morning, crowds had already gathered outside the New York courthouse where jury selection will begin for Bankman-Fried's trial. Court officials told Decrypt reporter André Beganki that there would be no "perp walk" to publicly bring Bankman-Fried into the courthouse, because he's already in custody.
A judge dismissed a motion from Bankman-Fried's attorneys to allow him to be released from jail during the duration of his trial. By 9 a.m., court officials had admitted him into the courthouse.
A view from outside the courthouse where Sam Bankman-Fried will be tried. Image: Decrypt/André Beganksi
Things to know and what to expect:
Editor's note: This article was originally published on October 3 and last updated on October 27 at 10:17 a.m..
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