Former FTX CEO Sam Bankman-Fried arrives for a bail listening to at Manhattan Federal Court on August 11, 2023 in New York City.

Michael M. Santiago/Getty Images

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Michael M. Santiago/Getty Images

Former FTX CEO Sam Bankman-Fried arrives for a bail listening to at Manhattan Federal Court on August 11, 2023 in New York City.

Michael M. Santiago/Getty Images

The trial of disgraced crypto mogul Sam Bankman-Fried kicked off in earnest Wednesday with legal professionals from each side delivering their opening statements.

“He had wealth. He had power. He had influence,” mentioned Thane Rehn, an assistant U.S. lawyer for the Southern District of New York. “But all of that — all of that — was built on lies.”

Rehn charted the rise and equally dramatic fall of Bankman-Fried’s crypto empire, which embrace the cryptocurrency change FTX and a crypto-focused hedge fund, known as Alameda Research.

“A year ago, it looked like Sam Bankman-Fried was sitting on top of the world,” Rehn mentioned, nodding to Bankman-Fried’s lavish life-style.

High-flying life-style in a $30 million Bahamas residence

Bankman-Fried lived in a $30 million residence in The Bahamas, and he traveled all around the world on personal planes. Rehn famous Bankman-Fried frolicked with actors, athletes, and politicians.

Rehn detailed how Bankman-Fried took cash from FTX clients “to make himself even richer.” He purchased property for household, mates, and himself, and he made speculative investments.

Bankman-Fried’s crypto firm was like an enormous piggy financial institution, the prosecution alleges. At any time, Bankman-Fried might — and did — use cash from FTX clients.

Bankman-Fried, who has been jailed for greater than a month, appeared to pay shut consideration. He took notes on a laptop computer he’s permitted to make use of throughout the trial.

A “math nerd” from MIT

His lead lawyer, Mark Cohen, pushed again on that narrative which instructed that Bankman-Fried is a villain. He mentioned FTX in its infancy was rising at an unimaginable tempo, “like building a plane as you’re flying it.”

“Sam didn’t defraud anyone,” he mentioned. “Sam did not steal from anyone. He did not intend to steal from anyone.”

Cohen criticized the federal government for displaying {a photograph} to the jury of Bankman-Fried in what was his trademark look earlier than he was despatched to jail in August: shorts and a t-shirt, with unkempt hair.

Cohen sugested Bankman-Fried was really “a math nerd” who went to MIT. He was somebody, he added, “who didn’t drink or party.”

Cooperating witness was former girlfriend

After Bankman-Fried was arrested in December, prosecutors filed legal fees towards 4 members of his interior circle, together with Caroline Ellison, who was Bankman-Fried’s girlfriend on the time and CEO of Alameda Research.

Rehn instructed the jury they’ll hear instantly from that quartet of cooperating witnesses, together with Ellison.

Cohen inspired jurors to be skeptical of their testimony, noting that they had pleaded responsible and are prone to obtain lighter sentences because of their cooperation.

In an try to preempt that argument, Rehn urged jurors to “scrutinize their testimony carefully.” But, he instructed them, they’ll supply first-hand insights into the multibillion-dollar fraud the federal government alleges Bankman-Fried perpetrated with their assist.

Witnesses testify: Customer who misplaced $100,000

Among the primary witnesses known as on to testify was a commodities dealer from London, Marc-Antoine Juilliard. He mentioned that, when the change started to disintegrate, he was assured by tweets from Bankman-Fried, however quickly after he was unable to withdraw his bitcoin and misplaced a complete of $100,000.

Julliard mentioned earlier than he purchased crypto for the primary time in 2021, he did loads of analysis into FTX. He noticed adverts, together with one with Gisele Bündchen, and famous the corporate was sponsoring Formula One racing and that “major firms seemed to be involved” in backing FTX. All this made him snug. “They don’t commit hundreds of millions of dollars without doing due diligence,” he mentioned of the enterprise capital companies that invested in FTX.

The second witness was Bankman-Fried’s school roommate and longtime good friend Adam Yedidia, who has been supplied immunity. He labored for Alameda for 2 months when he was ending a Ph.D., then was employed by Bankman-Fried as a software program developer for FTX.

At the start of his testimony, Yedidia was requested if he might establish SBF within the courtroom. He stood up. “I see him,” he mentioned, pointing on the defendant and mentioned he thought-about him a detailed good friend. He famous that Bankman-Fried was carrying a grey swimsuit and purple tie (SBF, who nearly at all times appeared in public with a mane of messy curly hair and saggy shorts, obtained a haircut earlier than the trial, and wore a swimsuit on the primary two days of the trial.)

Yedidia was introduced with a binder of proof — images of the lavish penthouse residence within the Bahamas the place he lived with Bankman-Fried and 7 different FTX workers. “I believe Alameda purchased the apartment at Sam’s direction,” he mentioned.

He resigned in 2022, as FTX started to implode. When the prosecutor requested him why, he mentioned: “I learned Alameda has used FTX customer deposits to pay back creditors.”

“I was concerned that as a developer at FTX I may have unwittingly written code that contributed to the commission of a crime,” he added.

Yedidia himself was carrying a swimsuit. His prime button was undone. His jet-black hair was a large number.

The trial continues on Thursday, and it’s anticipated to final six weeks.