FTX defense team faces an uphill battle

Next Monday, week 2 of the trial against Sam Bankman-Fried and FTX starts. One thing seems clear after the first week. Even though Sam has assembled a great team of lawyers, defending him becomes an almost impossible task as evidence against him is piling up.

His own former CTO (Chief Technology Officer) Gary Wang accused him yesterday of lying to his FTX customers about the state of the company when a $10 billion hole had already been made.

Growing pains

So far, Sam’s defense has argued that FTX was growing so quickly that it was only natural that some matters were not properly taken care of right away.

His lead lawyer Marc Cohen stated:

“You know there is an expression about startup companies that you all may have heard. Working on a startup or at a startup is like building a plane as you are flying it. You will learn that happened here as well. Sam and his colleagues were building the plane as they were flying it.”

His defense also tried all week to blame Caroline Ellison, Sam’s ex, who he appointed as CEO of Alameda, the investment fund with which FTX worked closely. Sam’s attorney tried to convince the jury that although Sam made nice profits with FTX, the FTX’s funds were mostly used to cushion Alameda’s losses.

Stupid

Several experts have now dissected that defense and seem less than impressed.

Carl Tobias, a law professor at the University of Richmond, said he did not think this apparent “in over his head” approach was impressing a jury that had to decide in a $10bn fraud case.

“Jurors are not stupid,” he explained. “It’s not like he was reared by people who didn’t understand finances, right?”

Of course, as we’ve reminded you, Bankman-Fried’s parents, Barbara Fried and Joseph Bankman, are celebrated Stanford Law School professors.

“I just don’t see how the jury’s going to receive that very well, given what he did with all the money of other people. It’s hard to believe that they would have much sympathy for that,” Tobias continued. “It’s kind of like ‘So what?’ to people who work for a living, that type of thing, who are likely to be on the jury.”

Gary Wang

The most compromising testimony yet came from Sam’s former friend and CTO Gary Wang, who stated that when Sam sent a tweet claiming FTX was “fine”, it turned out to be simply a lie.

According to Gary, FTX already had a debt of 10 billion at that time and customers could no longer be paid.

Key witness

Next week it will be really exciting for Sam, of course, when it will be his ex’s turn. Caroline is the key witness at the trial

Meanwhile, several crypto influencers cannot wait for the process to end so that the focus can return to Bitcoin, Ethereum and other digital coins.