Sam Bankman-Fried’s trial is underway in a packed New York courtroom. During the first week, the disgraced FTX founder kept his eyes fixed on his laptop as some of his best friends testified against him.
On Tuesday, another person once close to Bankman-Fried is set to take the stand for the prosecution: Caroline Ellison, the former CEO of Bankman-Fried’s hedge fund, and his on-again, off-again girlfriend.
Ellison’s testimony has been billed as one of the most crucial moments of the trial and is likely to put Bankman-Fried’s lawyers on their back foot as they try to fend off a flurry of damning allegations amid what many are calling the “trial of the decade.” Here are some highlights—and what to expect this week.
A haircut, a jury, a grown man
On the first day of the trial, it was official: Bankman-Fried’s famous mop of unruly curls—so distinctive that his employees once thought that a planned headquarters in the Bahamas should resemble his hair—was shorn.
With his hair short and a new suit bought, he watched jury selection take up Tuesday and part of Wednesday morning, as the prosecution and defense eventually settled on a diverse cast of 12 jurors and six alternates, including a retired, 68-year-old investment banker and a 50-year-old train conductor.
Then, lawyers for the government and the defense opened the trial and presented two tales of two very different Bankman-Frieds.
Thane Rehn, a member of the prosecution team, laid out in short, succinct sentences the case against the former FTX CEO. In contrast to media coverage that often emphasized Bankman-Fried’s boyish qualities, Rehn called him a “man” who “stole billions of dollars from thousands of people.”
However, Mark Cohen, a lawyer for the man who dominated the industry just a year ago, did not refer to him as “Mr. Bankman-Fried” or “the defendant.” Instead, he repeatedly called him “Sam.”
“In the end, Sam started and built two billion-dollar companies in the span of a few years,” Cohen concluded. “He didn’t steal any money.”
‘FTX was not fine’
The government’s first four witnesses were evenly split: two victims and two close confidants.
The victims who testified were Marc-Antoine Julliard, a French cocoa bean trader who lost more than $100,000 in crypto and cash once FTX collapsed, and Matt Huang, the cofounder of the venture capital firm Paradigm who invested $278 million into the failed crypto exchange. “We have marked it to zero,” Huang said when asked the current value of the almost $300 million investment in FTX.
The two Bankman-Fried confidants, however, provided more damning evidence of his alleged fraud.
The first was Adam Yedidia, one of Bankman-Fried’s best friends at MIT who later worked as a senior developer at FTX. Yedidia testified he had a fateful conversation with the former FTX CEO where Bankman-Fried told him in June 2022 that FTX was “not bulletproof,” in reference to Alameda’s growing debt to the crypto exchange.
Gary Wang, the former CTO of FTX and a cofounder of the crypto exchange, provided the most complete testimony so far of how Alameda allegedly withdrew $8 billion from FTX customers. “FTX was not fine,” he said. “And assets were not fine.”
Caroline Ellison—and what’s next
Lawyers for Bankman-Fried haven’t finished their cross-examination of Wang, and when the trial resumes on Tuesday (court is closed on Monday for the holiday), they will continue to pepper him with questions. U.S. District Judge Lewis Kaplan, who is presiding over the case, has repeatedly lambasted the defense for asking repetitive questions.
When Wang’s time on the stand is over, the government said it will call its star witness to the stand: Ellison.
She’s the former CEO of Alameda, which prosecutors have argued was the key entity that facilitated the misuse of FTX’s customer funds. In both of their opening statements, the government and lawyers of Bankman-Fried repeatedly referenced Ellison.
“She will tell you about how she and the defendant stole the money that customers entrusted to FTX and used it to make investments through Alameda,” said Rehn, one of the prosecutors.
After Ellison, the government still has one more key lieutenant to call to the stand: Nishad Singh, an FTX cofounder and close friend of Bankman-Fried’s younger brother. It’s not clear when, or if, he will testify, but we’re just one week into what prosecutors have estimated will be a six-week-long trial. The government also listed Ryan Salame and Sam Trabucco, other highly placed FTX and Alameda executives, as potential witnesses.
For now, all indications suggest that Ellison is likely deliver a number of bombshell allegations against Bankman-Fried, and that more sparks will fly.
