Sam Bankman-Fried Built FTX on a ‘Pyramid of Deceit,’ Prosecutor Says

Sam Bankman Fried, the onetime cryptocurrency mogul, built his FTX crypto exchange on a “pyramid of deceit” and a “foundation of lies and false promises,” a federal prosecutor said in closing statements on Wednesday at the criminal fraud trial.

Over more than two hours in a Manhattan courtroom in the morning, Nicolas Roos, the prosecutor, used scathing language to paint Mr. Bankman-Fried as a liar and fraudster. The FTX founder, Mr. Roos said, was driven by greed and was responsible for the collapse of the exchange a year ago, which left customers unable to recover their deposits. And Mr. Bankman-Fried, who had testified during the trial in his own defense, had repeatedly dissembled and dodged questions, Mr. Roos said.

Mr. Bankman-Fried “lied about big things and small things,” the prosecutor said, pointing out that the defendant said he “couldn’t recall” more than 140 times in response to questions on cross-examination. “It was uncomfortable to hear,” Mr. Roos said.

The prosecutor’s closing statement came after 15 days of testimony in Mr. Bankman-Fried’s trial, which is one of the most high-profile financial crime cases in years. The outcome of the case will be seen as a referendum not only on the rapid rise and fall of Mr. Bankman-Fried’s business empire, which at its peak was valued at $32 billion, but also on the volatile crypto industry, which only two years ago was riding high before melting down last year.

The spectacular implosion of FTX last November set off a chain reaction that led to the collapse of other crypto firms. Mr. Bankman-Fried’s arrest and subsequent charges also set off regulatory crackdowns across the crypto universe.

At the heart of Mr. Bankman-Fried’s case is whether he committed fraud and treated FTX as his personal piggy bank. Prosecutors contend that he stole as much as $10 billion from FTX’s customers to pay for investments in other crypto firms, buy lavish real-estate in the Bahamas, where the exchange was headquartered, and to prop up a crypto trading firm he also founded, Alameda Research.

The 31-year-old has pleaded not guilty to seven counts of fraud, conspiracy and money laundering. If convicted, he could face what amounts to a life sentence.

The defense is expected to deliver its closing statement on Wednesday afternoon, after which the prosecution will have a brief rebuttal presentation.

Continue reading on