FTX Trial Update: Testimony from Four Key Witnesses

(To this point, I have tried to avoid covering the sensationalism of the FTX trial, but it absolutely will determine US Crypto Law going forward – ed)

A year ago, Sam Bankman-Fried was synonymous with luxury properties, political contributions, high-profile investments, and media features. Assistant U.S. Attorney Thane Rehn described this scene during the initial proceedings of the landmark crypto trial. “It was all an illusion,” he declared, alleging that the co-founder of Alameda Research and FTX deceived the public to amass wealth and sway political decisions in the capital. Even Bankman-Fried’s defense team seemed unsettled by Rehn’s statements. However, defense attorney Mark Cohen defended his client, characterizing him as a businessperson who made missteps during rapid expansion periods. “There wasn’t any embezzlement,” Cohen emphasized.

Throughout the trial, the defendant’s parents, Joseph Bankman and Barbara Fried, have been present. Joseph occasionally expressed optimism, while Barbara looked on, deeply engrossed in her son’s proceedings.

This past week saw four significant testimonies at the U.S. District Court in Manhattan:

Marc Julliard: The prosecution began with a Parisian cocoa trader now residing in London. Julliard, an unfortunate participant in the FTX fallout, recounted his distress at not being able to withdraw nearly $100,000 worth of Bitcoin. Although he never dealt with futures on FTX, Julliard’s Bitcoin was a significant portion of his life savings. The defense tried to minimize the significance of this testimony.

Adam Yedidia: Yedidia, an MIT acquaintance of Bankman-Fried, had roles at both Alameda and FTX. He delved into how FTX handled customer funds via an Alameda offshoot and expressed his concerns about the debt crisis to Bankman-Fried. Yedidia quit in November 2022, revealing that Alameda was utilizing FTX client funds to offset its debts. He has been collaborating with the Department of Justice since.

Matthew Huang: Paradigm co-founder Huang shed light on his firm’s significant investment in FTX, which resulted in substantial losses. Huang admitted to not conducting comprehensive due diligence, relying instead on Bankman-Fried’s information. He also remarked on Bankman-Fried’s resistance to investor representation on FTX’s board.

Gary Wang: Wang, once a collaborator with Bankman-Fried, provided an insightful overview of FTX and Alameda’s operations. He highlighted the evolving financial entanglement between the two entities and revealed attempts to cover up financial discrepancies. Wang’s testimony, slated to continue next week, promises more revelations about the company’s inner workings.

As the trial unfolds, all eyes remain on its proceedings, and the ramifications it might have on the broader crypto sector.