Oct 4, 2023

Who’s Who in the Sam Bankman-Fried Trial

Ava Benny-Morrison, Bloomberg News

Sam Bankman-Fried, co-founder of FTX Cryptocurrency Derivatives Exchange, departs from court in New York, US, on Thursday, Feb. 16, 2023. US prosecutors said their discovery that Sam Bankman-Fried used a virtual private network to access the internet on two recent occasions raises concerns that the FTX co-founder could be hiding his online activities. , Bloomberg

(Bloomberg) -- Opening arguments start Wednesday as Sam Bankman-Fried stands trial accused of orchestrating one of the biggest financial frauds in American history. At his peak, he was the crypto industry’s golden boy. He had $16 billion and a digital assets empire.Before opening arguments, the jury that will decide the fate of Bankman-Fried will be selected. Forty-six potential jurors returned to the Manhattan federal courthouse this morning. Once they present a short biographical summary, lawyers will decide on 12 jurors and six alternates.

The 31-year-old FTX co-founder arrived in the courtroom wearing a suit and tie. After opening statements, prosecutors are expected to call in their first witness, a coder for FTX, according to people familiar with the matter.

The trial will explore how Bankman-Fried came to run and allegedly ruin one of the largest crypto exchanges in the world. Prosecutors accused him of using FTX customer funds to engage in speculative trading through Alameda Research, FTX's hedge fund, to buy luxury real estate and for political contributions. Bankman-Fried has pleaded not guilty.

Here is who you can expect to hear from during the six-week trial:

The Defendant

Sam Bankman-Fried

FTX Co-Founder

Plea: Not GuiltyStatus: In CustodyAge: 31

Charges : Wire fraud, conspiracy to commit wire fraud, securities fraud and commodities fraud, conspiracy to commit money laundering.

Allegations: Bankman-Fried is accused of orchestrating a years-long fraud at FTX, siphoning billions of dollars of customer funds from the exchange. He is accused of secretly giving Alameda Research a backdoor to funds on the FTX platform and lying to investors about the financial health of his companies. Bankman-Fried previously denied committing fraud and put the 2022 collapse of FTX down to poor internal controls and market upheaval.

The Guilty Pleas

Caroline Ellison

CEO Alameda Research

Plea: GuiltyStatus: Cooperating WitnessAge: 28SBF Ties: Former Bankman-Fried girlfriend; former trader at firm Jane Street with Bankman-Fried

Charges : Wire fraud, conspiracy to commit wire, commodities and securities fraud and conspiracy to commit money laundering

Allegations: Ellison joined Alameda Research as a trader in 2018 and climbed the ranks to become CEO. Overseeing the hedge fund, she knew Alameda had access to an unlimited line of credit at FTX that allowed the exchange to borrow customer funds without having to post collateral, she testified at a plea hearing in December, 2022. When the crypto market began to slide in summer 2022, she and others agreed to borrow several billion dollars in customer funds from FTX to repay Alameda’s loans to lenders. Ellison also testified that she and Bankman-Fried agreed to craft misleading financial statements that concealed the borrowing relationship.

Gary Wang

Former FTX CTO/Co-Founder

Plea: GuiltyStatus: Cooperating WitnessAge: 31SBF Ties: Attended math camp in high school, college roommates, founded FTX with Bankman-Fried

Charges : Wire fraud, conspiracy to commit wire fraud, conspiracy to commit commodities fraud and conspiracy to commit securities fraud

Allegations: Wang and Bankman-Fried met at math camp in high school, joining forces years later to co-found FTX. At a plea hearing in December, 2022, Wang, the exchange’s chief coder, said he was directed to change the platform’s code to give Alameda Research special privileges on FTX. He did so knowing investors and customers were told Alameda had no such access, he said.

Nishad Singh

FTX Director of Engineering

Plea: GuiltyStatus: Cooperating WitnessAge: 27SBF Ties: Singh was a childhood friend of Bankman-Fried’s younger brother and lived with Bankman-Fried in The Bahamas

Charges : Wire fraud, conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and campaign finance violations.

Allegations: Singh led a team of engineers at FTX and was responsible for the platform’s coding. In mid-2022, he learned Alameda Research had borrowed seven billion dollars worth of customer funds from FTX and couldn’t repay what it owed. Despite this, Singh said he agreed to use Alameda funds, effectively customer deposits, to cover company expenditures. He said during a plea hearing in early 2023 that he also gave auditors misleading information that Bankman-Fried could then use in fundraising efforts.

Ryan Salame

Co-CEO of FTX’s Bahamian subsidary

Plea: GuiltyStatus: Not cooperatingAge: 30SBF Ties: Salame joined Alameda in 2019, was a member of Bankman-Fried’s inner-circle

Charges: Conspiracy to make unlawful political contributions and operate an unregistered money-transmitting business.

Allegations: Unlike his colleagues, Salame pleaded guilty but did not agree to testify against Bankman-Fried at trial. Prosecutors allege Bankman-Fried used Salame and other executives as straw donors, making millions in political donations leading up to the 2022 election. Salame, who was a prolific Republican donor, agreed to a $1.55 billion forfeiture order as part of his plea deal in September, 2023. Though the government will only pursue that amount if Salame fails to hand over a much smaller asset pool – including $6 million in cash, two properties and a Porsche 911 Turbo.

Power Players

Other potential witnesses could come from Bankman-Fried’s inner-circle of family and executives at FTX. They haven’t been charged in the case.

Barbara Fried and Joe Bankman

Bankman-Fried’s Parents

Sam Bankman-Fried's parents have been under scrutiny over their roles advising FTX in the lead up to its collapse. FTX's new management sued the Stanford law professors in September to recover "millions of dollars in fraudulently transferred and misappropriated funds", including a $10 million gift from their son. The couple were included on a list of potential witnesses who may feature in their son's trial.

Sam Trabucco

Co-CEO Alameda Research

Trabucco abruptly stepped down in August 2022, stating in a tweet that he had chosen “to prioritize other things” and would instead become an adviser at the firm. Trabucco has posted on social media about his love of gambling and how his poker strategy helped inform Alameda’s trades.

Ramnik Arora

FTX Head of Product

Arora led efforts to lure more customers to the crypto exchange and brokered deals with retail-focused startups. He helped put together some of Bankman-Fried’s bailout deals, including the ill-fated agreement to prop up BlockFi Inc. with a $400 million revolving credit facility with an eye towards FTX possibly acquiring the crypto lender — BlockFi filed for bankruptcy shortly after FTX did.

Constance Wang

FTX’s Chief Operating Officer/Co-CEO of FTX Digital Markets

One of Bankman-Fried’s top lieutenants, Wang served as FTX’s chief operating officer until November and was also the co-CEO of FTX Digital Markets. She managed global user growth, partnerships and public relations, and also represented the company publicly with appearances at conferences.

Daniel Friedberg

FTX Chief Regulatory Officer

In a lawsuit filed in June, the new management of FTX accused Friedberg of enabling Bankman-Fried’s alleged crimes, and helping to orchestrate a “wide-ranging con game” to raid billions of customer dollars. He has not been accused of wrongdoing by prosecutors or regulators.

Ryne Miller

FTX US General Counsel

Miller was central to efforts to push Bankman-Fried to file for bankruptcy at FTX and step down as chief executive officer. He was seen as an adult in the room who was working to preserve “whatever is preservable” of the crypto exchange.

Can Sun

FTX General Counsel

Like Friedberg, Sun had previously worked at Silicon Valley law firm Fenwick & West.

In the Courtroom

US District Judge Lewis Kaplan

Age: 78

Background: Kaplan was a partner at Paul Weiss Rifkind Wharton & Garrison before he was appointed to the federal bench in 1994 by President Bill Clinton.

Previous Cases: Kaplan is currently overseeing author E. Jean Carroll’s battery and defamation suits against former President Donald Trump. He also presided over a lawsuit by a woman who alleged she was loaned out to Prince Andrew by Jeffrey Epstein for sex. Andrew settled the case in February, roughly a month after Kaplan denied his motion to dismiss the suit. In 2014, he famously refused to enforce a $9.5 billion judgment against Chevron for polluting the Ecuadorian rainforest, instead charging the plaintiff’s lawyer with contempt.

Defense Lawyers

Mark Cohen

Age: 60

Background: A well-known trial attorney in New York, Cohen was previously a federal prosecutor in Brooklyn. He co-founded his boutique law firm Cohen and Gresser in 2002. Cohen took Bankman-Fried on as a client after the latter cut ties with lawyers at the firm Paul Weiss over a conflict of interest.Previous Cases: Cohen represented Ghislaine Maxwell, a close associate of Jeffrey Epstein, during her trial for sex trafficking in 2021. Maxwell was found guilty and is serving a 20 year jail term. Cohen also represented the founders of an African health care company, which was awarded $39 million, including interest, in restitution from Glencore in 2023 as part of a sprawling bribery case.

Christian Everdell

Age: 48

Background: A partner at Cohen and Gresser, Everdell started his career as a clerk for a Judge Raymond Dearie before getting his start in private practice as an associate at Debevoise and Plimpton. He was a prosecutor for almost a decade at the US Attorney’s Office for the Southern District of New York before joining Cohen’s firm in 2017.

Previous Cases: Alongside Cohen, Everdell represented Ghislaine Maxwell during her high-profile trial for luring underage girls for Epstein. As a federal prosecutor, he worked on terrorism, fraud and organized crime cases. Most notably, he helped investigate Mexican drug cartel leader Joaquín "El Chapo" Guzmán, who was sentenced to life in prison in 2019.

Prosecutors

Nicolas Roos

Background: A Stanford Law graduate, Roos joined the Southern District of New York US Attorney’s Office in 2016. He worked in the public corruption unit before joining the securities and commodities fraud task force.

Previous Cases: Roos has been involved in some of the most high-profile white collar cases to come out of SDNY in recent years. He worked on the prosecutions of Nikola founder Trevor Milton, President Donald Trump’s former lawyer Michael Cohen and British billionaire Joe Lewis.

Danielle Sassoon

Background: After Sassoon joined the Southern District of New York US Attorney’s Office, she had a stint in the violent crimes unit before joining the securities and commodities fraud task force. The Yale Law School graduate previously clerked for Supreme Court Justice Antonin Scalia and was a litigation associate at the firm Kirkland and Ellis.

Previous Cases: Before co-leading the FTX investigation, Sassoon investigated organized crime, sex crimes and union corruption at the office’s violent crimes unit. She prosecuted cult leader Lawrence Ray for the torture and abuse of Sarah Lawrence College students, culminating this year in a 60 year prison sentence. Roos and Sassoon first worked together several years ago on a fraud case against Brooklyn habitual scammer Vitaly Broker over an online glasses scheme.

(Adds details from court proceedings.)