As FTX disgraced founder Sam Bankman-Fried steps to defend himself in the court on Thursday, here’s what has transpired ever since the FTX bankruptcy.
Sam Bankman-Fried will testify in defense of his actions leading up to the collapse of FTX and his entire digital asset empire. His legal team confirmed during a conference call with the judge on Wednesday that Bankman-Fried will take the stand at his fraud trial following the prosecution’s case. The 31-year-old FTX founder shall testify on Thursday afternoon unless there is a late change.
Bloomberg has published a new documentary dubbed “RUIN: Money, Ego, and Deception at FTX” that walks through everything that has happened after FTX’s epic collapse last November 2022.
The formerly esteemed cryptocurrency magnate is confronting the possibility of spending decades behind bars. He faces allegations of orchestrating the movement of FTX customer funds into Alameda Research, a related hedge fund, which were then utilized for high-risk investments, political contributions, and lavish real estate acquisitions. This financial maneuver transpired prior to both entities plunging into bankruptcy last year.
At FTX, the financial pit exceeded $8 billion. This represented the disparity between customers’ perceived account balances on the exchange and the actual funds available when the platform collapsed. Sam Bankman-Fried, who is currently facing charges related to fraud and money laundering, has depicted this colossal deficit as an inadvertent mistake on his part.
One of his attorneys pointed out that the absence of a chief risk officer within the company contributed to the oversight. However, two high-ranking FTX executives and Caroline Ellison, who heads his trading firm Alameda Research, have already admitted guilt to charges of fraud. Their cooperation with prosecutors has helped outline a narrative of a company that not only engaged in high-stakes ventures but also utilized customer funds to finance investments, political and charitable contributions, real estate acquisitions, loans to insiders, and more.
What Happens Next in the FTX Legal Case?
In many cases, defendants choose to abstain from testifying, recognizing the potential for their testimony to do more harm than good. However, in Sam Bankman-Fried‘s situation, he’s considering testifying, as it’s among his last defense strategies following weeks of detrimental testimony from former associates within his close circle. Former federal prosecutor Brian Klein stated:
“He couldn’t stop talking to press and wider world after FTX collapsed and before he was arrested and then while out on bail so no one should be surprised that he is choosing to take the stand”.
During the conference call, the prosecutors revealed their intention to call one more witness on Thursday morning. An FBI agent will provide a summary of chats that were automatically deleted.
On the defense side, Bankman-Fried’s lawyers also stated their plan to call three witnesses before their client. These witnesses include Joseph Pimbley, a financial expert, who will testify about Alameda’s line of credit and FTX’s spot margin program.
Closing arguments are likely to occur early next week, after which the jury will commence their deliberations. Sam Bankman-Fried’s testimony will mark the first time the public has heard from him in months. In July, the FTX co-founder agreed to a gag order, which significantly limited his interactions with the media.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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