Summary of the day
The criminal trial of the former cryptocurrency mogul Sam Bankman-Fried has completed its second day. Court will be back in session at 9.30am on Thursday, with Bankman-Fried’s former friend Adam Yedidia returning to the witness stand.
Here’s a recap of the day’s developments:
Jury selection was completed on Wednesday after a slow start on Tuesday. A panel of 12 with six alternates was selected to hear the case before attorneys for each side began presenting their opening arguments.
In his opening argument, prosecutor Thane Rehn alleged that Bankman-Fried built his empire “on lies” and lived a glamorous life of wealth and power while duping the people who invested in his companies.
The prosecution alleged that money from customer deposits was effectively going directly into Bankman-Fried’s pocket, claiming that their funds never made it into the FTX exchange and instead were funneled elsewhere without notice.
Defense attorneys countered by presenting Bankman-Fried as a “math nerd” with good intentions who got in over his head. “Sam didn’t defraud anyone. Sam didn’t intend to defraud anyone. Sam acted in good faith,” Mark Cohen said. “There was no theft.”
The defense argued that any mismanagement at FTX was the result of the company’s rapid growth which overwhelmed Bankman-Fried’s ability to make decisions. “Some things got overlooked … things an older company would have built out over time,” Cohen said.
The prosecution’s opening argument teased blockbuster testimony from Caroline Ellison – Bankman Fried’s on-again, off-again girlfriend and the one-time head of Alameda, who they claimed could describe how she and Bankman-Fried siphoned money to Alameda.
Cohen also appeared to cast Ellison as the reason behind FTX’s downfall, alleging that she ignored Bankman-Fried’s financial advice and left the companies exposed to market shocks.
The prosecution’s first witness, commodities trader Marc-Antoine Julliard, told the court he was unable to withdraw about $100,000 from FTX in early November. He said Bankman-Fried came across to him as someone who wanted “to do good towards the industry”.
The second witness, Adam Yedidia, told the court that he was a longtime friend who lived with Bankman-Fried and that he resigned shortly before the firm declared bankruptcy because he had learned Alameda used FTX customer deposits to pay back its loans to creditors.
Updated
FTX developer tells court: 'I may have unwittingly contributed to a crime'
The second witness, Adam Yedidia, said he last saw Sam Bankman-Fried in November 2022 and has not spoken to him since.
The week FTX declared bankruptcy, “I received a phone call from another developer at the company,” Yedidia said in explaining his departure.
I heard that Alameda Research had used FTX customer profits to pay back its loans to creditors.
“After you learned that, what did you do?” prosecutor Danielle Sassoon asked.
I resigned.
The company went bankrupt some time after he resigned.
Yedidia was asked why he was testifying with an immunity order.
I was concerned that, as a developer for FTX, I may have unwittingly written a code that contributed to a crime.
Updated
