Lawyers presented their closing arguments to the jury that will decide Sam Bankman Fried's fate on Wednesday, presenting two different versions of how his crypto empire collapsed.
Nicholas Roos, the US Assistant Attorney for the Department of Justice, presented to the public that Bankman Fried is guilty of stealing and involving his business partners in a covering-up.
Roos called the scheme a 'pyramid of deceit', which was built by the defendant based on lies and false claims -- all in order to make money.
Roos went on to say that 'it eventually collapsed and left countless victims behind it'.
Mark Cohen, Bankman-Fried’s lead attorney in the defense, has reacted to what he called the government’s 'wrong' and 'unfair' portrayal that his client was a greedy,'movie antagonist' who had set out from the beginning to defraud others.
Cohen said that the reality is much less dramatic. He argued that the government had failed to prove its burden of proof, that Bankman Fried was the mastermind behind a conspiracy to defraud investors, customers and the general public.
The case revolves around the collapse of FTX - the crypto exchange that Bankman-Fried founded - which spiraled into bankruptcies a year earlier, locking out hundreds of thousands customers and preventing them from moving their money. According to the government the fraud was taking place behind the scenes while Bankman-Fried’s other company, Alameda Research was secretly stealing money from customers' deposits.
Roos informed the jury that the main issue at stake in the case was whether Bankman-Fried knowingly knew that taking the moneywas wrong and that it wasn't just an honest mistake made by a startup founder who had become distracted.
Roos stated that the answer was clear: He accepted the money, he understood it was wrong but he still did it. Because he believed he was cleverer... He thought he could speak his way out.
The prosecutor stated that Bankman-Fried lied when he took the stand and testified for three days in front of the jury.
Bankman-Fried "created a story that was conveniently crafted to exclude him from the fraud."
Roos stated that Bankman Fried was confident and had a perfect memory', when questioned by the attorney. But when he was questioned by his own attorney, Roos noted that Bankman-Fried had a 'perfect memory'. It was unpleasant to hear.
Roos, addressing Bankman-Fried, said that the defense of his companies was a lie.
Bankman-Fried, however, thought that it was okay and claimed that he had not been aware of most of the actions at issue. But 'not one other witness' said the same. Three senior executives from the defendant's inner circle were among the government witnesses who saw the mixing of funds as "a bright redline."
Over the course of several hours, Roos tried to demonstrate how Bankman Fried was duplicitous and fraudulent for years while he built his crypto empire.
Bankman-Fried repeatedly assured reporters, customers and investors that the deposits of their clients were secure. Bankman-Fried, while publicly claiming that FTX is a neutral piece' of market infrastructure and a wholly separate from Alameda, Roos stated, compiled a sheet that showed Alameda’s $65 billion credit line -- one of many secret, special privileges accorded to Alameda, as a FTX customer.
Roos stated that the 'public lies" show his criminal intention.
Bankman-Fried was glued to his laptop as Roos addressed the jury. He would occasionally type and scroll.
Joseph Bankman, his father, and Barbara Fried, his mother, briefly greeted him in the morning, before the trial started, but they were absent for the majority of the closing argument by the government.
Cohen's closing remarks began around 3pm. He reacted directly to the narrative of the government.
Cohen stated that the government had repeatedly tried to make Sam out to be a villain or monster. It's unfair and wrong.
He said that they 'wrote him into a film villain' in order to get jurors to overlook the truth.
Cohen took aim at Roos’ cinematic pointing towards the defendant (Roos called him 'that man') -- a maneuver Cohen claimed was made 'for effect'.
The government focused on Bankman Fried's hair and clothes to perpetuate the film-villain narrative. They also listened to testimony about his sexual life and took photos of him sleeping in a private plane or posing awkwardly next celebrities.
Cohen said, 'We will agree that Sam was at one time the worst-dressed chief executive officer of all time.' But that's no crime.
Cohen said that the government's case was based on a false premise that FTX, and Alameda had been fraudulent from the beginning. Cohen said that the government claimed four people gathered together to create a criminal organization. The evidence, however, shows that these people were close friends who were committed to the businesses they were creating.
Cohen stated that 'in the real world, unlike in the movies, things can be messy'. People "make mistakes they later wish they had fixed."
Cohen emphasized Bankman-Fried’s own admissions that FTX lacked a'significantly built-out system of risk management' and did not have a chief risks officer.
Cohen stated that 'poor risk management isn't a crime'. Cohen said that bad business judgment was not a crime.
Cohen asked jurors if Bankman-Fried was such a criminal mastermind: 'why would you bring him before Congress to be publicly questioned? Answer: No.
Cohen will continue his closing statement Wednesday afternoon. This is followed by the government's rebuttal. The judge is expected to present the case to the jury on Thursday morning.