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Crypto
October 2023
Unraveling the FTX Scandal: an Overview of the SBF Trial so Far
Sam Bankman-Fried (commonly known as SBF), the ex-CEO of the now-defunct FTX crypto exchange, is in the spotlight for alleged fraud during his tenure. As we approach the conclusion of the trial's second week, major witnesses have shed light on SBF's actions, FTX's operations, and potential illicit activities.
Caroline Ellison, previously at the helm of Alameda Research, offered one of the most explosive testimonies. She admitted to diverting £12 million from client accounts to settle outstanding lender debts, all under SBF's directive. In addition, she mentioned a controversial £124 million payment to Chinese authorities aiming to regain control over £824 million in locked trading funds, although no bribery charges are currently associated with the case.
Key Events in the SBF Trial So Far
The trial, set to span six weeks, began with jury selection on October 3. With a tech ban in the courtroom.
The first week was nothing short of dramatic. The prosecution described SBF’s reign as a facade of deceit, showcasing images of him with influential figures, marking the zenith of his clout before FTX's downfall. In stark contrast, the defence portrayed an overwhelmed SBF, struggling to manage the myriad challenges of leading a booming crypto venture.
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See our workFTX’s co-founder, Gary Wang, added another layer to the narrative, revealing that Alameda Research's funding often came directly from FTX clientele. Transactions from these clients would funnel into Alameda before being rerouted.
Matt Huang, a significant player from the crypto investment firm Paradigm, testified about his firm's hefty £229 million investment in FTX during 2021-2022. The core of his statement revolved around his lack of knowledge about FTX's use of customer funds to sustain Alameda Research, a disclosure he claims would have immediately ceased his partnership.
A diverse jury, from a train conductor to a former Stanford-educated investment banker, will determine the fate of this case.
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