Was FTX a Risky Business or Was SBF a Rogue Trader?

The trial of Sam Bankman-Fried (SBF), the founder of FTX, is reaching a critical juncture as the closing arguments are presented for the jury’s deliberation. Bankman-Fried faces several charges, including fraud and conspiracy to commit money laundering, and the outcome carries significant consequences for the crypto industry.

SBF’s Cohen: Sam worked at Jane Street, a highly regarded trading firm. He wanted to create a Jane Street for crypto. From Jane Street he learned you could fund it with third party loans. Then they created the futures exchange, FTX, unsurprisingly called that.

— Inner City Press (@innercitypress) November 1, 2023

The Prosecution’s Case: Deception and Greed

Assistant US Attorney Nicholas Roos, leading the prosecution, maintains that the case is straightforward, focusing on deceit, theft, and unchecked greed. Roos emphasized that SBF’s actions were not obscured by complex crypto terminology, but rather revolved around plain falsehoods conveyed to the public and the court. He highlighted SBF’s attempts to mislead regarding the security and transparency of user funds on the FTX platform.

Roos pointed out that SBF had the exclusive authority and access to grant Alameda Research, FTX’s sister trading firm, secret and preferential treatment. He refuted the argument that other high-ranking officials at FTX and Alameda could have orchestrated the alleged fraud without SBF’s knowledge, making it clear that the ultimate responsibility rested with him.

Also Read: Sam Bankman-Fried Trial: Did He Know About FTX’s $8 Billion Shortfall?

The Defense’s Case: Innovation and Growth

Mark Cohen, SBF’s lead counsel, painted a different picture. He acknowledged that his client did take excessive risks but argued that this was not a crime. He described SBF as an innovator who wanted to create a “Jane Street for crypto,” highlighting the success and legitimacy of FTX and Alameda Research. He underscored that even competitors acknowledged the value of FTX and its native token, FTT, disputing claims of fraudulent practices.

While Roos sought to humanize the impact of SBF’s actions, shedding light on the anxiety and distress faced by individual investors who had entrusted their money to FTX, Cohen, in his closing argument, stressed the legitimacy and innovation brought to the table by FTX and Alameda Research. He acknowledged the risks undertaken but maintained that these were intrinsic to establishing a groundbreaking business in the emerging cryptocurrency sector.

Cohen reminded the jury of SBF’s background and intentions, portraying him as a visionary who may have pushed the boundaries but had not veered into criminal territory.