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Sam Bankman-Fried “told a story, and he lied to you,” a federal prosecutor said Wednesday in his closing argument against the FTX founder.
The U.S. Department of Justice is wrapping up its case against Bankman-Fried after nearly five weeks. Assistant U.S. Attorney Nicholas Roos, who is presenting the DOJ’s denouement, opened by noting there was “no dispute” that billions of dollars worth of customer funds from the FTX crypto exchange were gone. Bankman-Fried faces two counts of wire fraud and five counts of conspiracy tied to the operation and collapse of FTX and Alameda Research, Bankman-Fried’s trading firm.
“This is a pyramid of deceit by the defendant built on lies and false promises,” he said.
Roos asked the jury to keep three questions in mind as they review the evidence: where the money went, what happened and who was responsible, repeating these questions several times.
“Now that you’ve seen all the evidence and heard all testimonies, you know the answer,” Roos said, pointing to Bankman-Fried. “This man,” the prosecutor said. “The defendant is responsible.”
Bankman-Fried’s former employees quit when they learned about the missing money, and his fellow executives testified they didn’t know customer funds were being misused until it was too late, Roos said.
“Their understanding was, customer funds were not allowed to be used by FTX or anyone else,” he said. “Customer funds belonged to customers.”
Roos pointed to witness testimony and Bankman-Fried’s own turn on the stand, saying the defendant morphed into a “different person” when answering the DOJ’s questions as opposed to defense attorney Mark Cohen’s.
“He came up with a tale,” Roos said, asking the jury if they noticed how during cross-examination, Bankman-Fried couldn’t remember details, whereas during the direct examination, he frequently described situations from his life. “You’d have to ignore the evidence to believe his story.”
Later, Roos also pointed out another seemingly obvious explanation for why Bankman-Fried was solely responsible: He was the only person who was involved in and controlled both FTX and Alameda and, thus, was the only one who had access to both companies.
Alameda CEO Caroline Ellison, he said, never worked for FTX, while Gary Wang and Nishad Singh were only ever employees at FTX, and never Alameda. “So it couldn’t have been them alone,” Roos argued.
“It was one person,” he said, pointing his finger yet again in Bankman-Fried’s direction. “The defendant.”
Digging the hole deeper
After pointing out the “special privileges” on FTX that let Alameda allegedly take FTX customer funds, Roos walked the jury through six times when Bankman-Fried “chose to double-down” and dig “the hole deeper” at FTX and Alameda. The government’s whirlwind review of the month-long criminal trial kicked off in 2021, when Bankman-Fried, according to analysis from a data expert’s testimony, used over $1 billion of FTX users’ money to repurchase stock from an investor-turned-rival, Binance.
He then moved to a second key moment later that year, when Bankman-Fried continued to spend billions on new investments at a time when the prosecutor said it should’ve been clear Alameda, which had already borrowed billions from FTX users, had less assets than liabilities. “You don’t have to go to MIT to know that if you have more debts than money, and you want to spend more money, then you’re going to be more in debt,” he quipped to the jury.
Roos used the next two moments – Bankman-Fried’s instruction to Alameda to pay back third-party loans following a June 2022 market crash, and his alleged involvement in creating “fake” Alameda balance sheets for lenders – to point out specific gaps in Bankman-Fried’s testimony.
Roos alleged that Bankman-Fried “lied on the stand” when he claimed he wasn’t aware, for example, that Alameda was already verging on insolvency by this point (a fact Ellison testified that she discussed with him at the time). The prosecutor pulled up Google metadata showing that Bankman-Fried created a spreadsheet showing Alameda owed a large amount to FTX and then set up a meeting to discuss it with several deputies. The spreadsheet and meeting were present in the testimony of other witnesses, but went unaddressed by Bankman-Fried, Roos noted.
The prosecutor wrapped up by moving to late 2022, when Bankman-Fried continued to make investments in companies like Modulo and SkyBridge Capital despite testimony from other witnesses, like senior FTX executive Nishad Singh, that Bankman-Fried knew this would mean drawing on user deposits.
Roos then pointed out the final key moment: Bankman-Fried’s public “assets are fine” tweet on Nov. 7, 2022, a day after he wrote in a private memo that “we have enough to process 1/3 of remaining client money.”
Wrapping up the case
The prosecution and defense rested their respective cases between the end of last week and Tuesday. Closing arguments are expected to last through all of Wednesday, with the DOJ potentially presenting a rebuttal argument as well at the end of the day or on Thursday.
Court got off to a rough start Wednesday with a juror running late, followed by the session needing to be delayed due to technical issues with some of the monitors that display exhibits.
Bankman-Fried’s parents, who have been present throughout the duration of the trial, arrived at the Manhattan courthouse close to 9 a.m., but left the courtroom prior to the government’s closing argument.
Edited by Nick Baker and Marc Hochstein.