Cocoa bean trader who missing $100,000 to FTX to start with witness in SBF trial

Sam Bankman-Fried Trial appears at Federal Court docket in New York on Oct. 4th, 2023.

Artist: Claudia Johnson

Marc-Antoine Julliard commonly trades cocoa beans. But in the spring of 2021, the London-based mostly commodities broker decided to diversify into cryptocurrency trading. His system of option was FTX.

Two years later on, Julliard stood as the prosecution’s first witness in the felony fraud trial against FTX founder Sam Bankman-Fried, who’s accused of misusing billions of bucks in consumer funds.

In testimony that lasted around 50 minutes on Wednesday, Julliard recounted his knowledge with FTX, such as the “extremely nervous” emotion he had the day he unsuccessfully attempted to withdraw part of the $100,000 value of crypto and dollars he experienced saved on the web-site. He and countless numbers of other FTX clients had been pretty much wiped out when the exchange went belly up late very last 12 months.

Like numerous others, Julliard reported he he was below the perception that there had been “powerful financials powering the corporation.”

Julliard is the poster kid for the scenario the prosecution laid out in its opening assertion as it tries to verify to a jury that customers were being led to feel the funds they saved with FTX was risk-free. Potential buyers, Julliard stated, ended up drawn in by means of savvy advertising and marketing, with no cause to think that FTX would be repurposing their crypto money.

In a demo that is established to previous 6 months, Bankman-Fried, a man as soon as revered as the “white knight” of crypto, faces 7 federal fees, which include wire fraud, securities fraud and dollars laundering, that could place him in prison for the relaxation of his daily life.

A jury was seated soon right after 11:30 a.m. (nevertheless four of the 12 jurors ended up previously hunting to be dismissed). Opening statements began about an hour later. Julliard took the stand just in advance of 2 p.m. to a packed courthouse in Manhattan.

As the direct witness, Julliard aided lay out the government’s narrative. Much of his decision to obtain into FTX experienced to do with the celebrities and enterprise resources attached to the brand name. He referenced an ad with supermodel Gisele Bündchen and Components 1 marketing. He also pointed to prolific media protection, which bolstered his belief in the enterprise.

Julliard was not an intense crypto trader. He reported he in no way participated in margin investing, or borrowing dollars to make buys, nor did he have interaction in a lending method made available by the corporation that permitted customers to make curiosity on idle crypto.

Sam Bankman-Fried sits with his protection group in the course of his fraud demo about the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Courtroom in New York Metropolis, U.S., October 4, 2023 in this courtroom sketch. 

Jane Rosenberg | Reuters

Protection wishes consumers to shoulder blame

The protection is seeking to make clientele accountable for what it claims have been their options to invest in and trade crypto.

“Sam failed to defraud any one,” explained Mark Cohen, Bankman-Fried’s lawyer, in his opening assertion. Cohen named it a “hindsight situation” introduced by the government, and stated that just simply because individuals lost cash, isn’t going to suggest the 31-year-old Bankman-Fried dedicated fraud. 

Bankman-Fried donned a contemporary fit with a purple tie and a clear haircut — a a lot various seem than the beach front shorts, sandals and wild curls that helped define his picture all through crypto’s heyday. The entrepreneur, who Cohen explained as a “math nerd that didn’t drink or bash,” diligently took notes on his air-gapped laptop computer as he conversed with each of his attorneys and, through breaks, in some cases stood whilst emphatically motioning with his palms as he spoke to his counsel.

All over each sides’ opening statements, Bankman-Fried held his eyes skilled on the jury box. His head was turned 90 levels to his proper to watch these who will eventually make a decision his destiny. Bankman-Fried was joined in courtroom by his moms and dads, who are the two currently being sued by FTX’s new management for getting allegedly “exploited their obtain and impact inside the FTX enterprise to enrich themselves…by hundreds of thousands of pounds.”

Cohen is projecting Bankman-Fried as a startup founder and equated functioning FTX and Alameda Investigation, his sister hedge fund, to “building a aircraft though traveling on it.” He explained to the jury that there was no risk management in position. Precisely, he mentioned the business didn’t have a chief hazard officer.

Far from the “cartoon of a villain” that the govt introduced, Cohen gave unique explanations for his client’s supposedly illegal steps. 1 illustration dealt with the magic formula backdoor baked into FTX’s code that prosecutors say gave Alameda a way to borrow much essential funds.

Cohen reported there was absolutely nothing secretive about this backchannel in the code base and said the exclusive obtain to FTX was there simply because Alameda was at first set up as a industry maker for the crypto exchange, which required the liquidity, specially in its early times.

Cohen reminded the jury that the 3 insiders who will acquire the stand from Bankman-Fried have all signed cooperation agreements with the authorities.

A $10 billion fraud

The prosecution’s opening statement was sent by Assistant U.S. Attorney Thane Rehn. About the study course of about a 50 % hour, Rehn drove home the place that everyday traders ended up the kinds who fell target to FTX’s scheme. By the summer time of 2022, he mentioned, much more than $10 billion experienced been stolen from hundreds of FTX customers who experienced trusted custody of their crypto and dollars to the platform.

Rehn mentioned the proof would exhibit jurors how Bankman-Fried lied to FTX consumers, traders and loan companies, and how he put in a fantastic amount of the dollars he stole for his possess great. Rehn referenced marketing campaign contributions, for instance, as a person way that Bankman-Fried seemed to curry favor on Capitol Hill.

Rehn known as Alameda a “second, more compact and far more secretive firm” started and managed by Bankman-Fried that was integral to the defendant’s alleged plan.

The govt also teed up its star witness, ex-girlfriend and Alameda’s ex-CEO, Caroline Ellison. She pleaded responsible in December to numerous rates and has been cooperating with the U.S. attorney’s business in Manhattan for months.

Rehn designs to display that Bankman-Fried set up his girlfriend at the top rated of his hedge fund, although he remained the just one contacting the pictures driving the scenes.

Allan Joseph Bankman, father of FTX Co-Founder Sam Bankman-Fried, and Barbara Fried, mother of FTX Co-Founder Sam Bankman-Fried, arrive at courtroom in New York, US, on Wednesday, Oct. 4, 2023.

Stephanie Keith | Bloomberg | Getty Illustrations or photos

Noticeably absent was the point out of Ellison’s co-CEO Sam Trabucco, who was a classmate of Bankman-Fried at MIT. Trabucco remaining FTX in Aug. 2022, and has stayed rather below the radar.

Also central to the government’s case is the alleged coverup to conceal Bankman-Fried’s crimes. These practices include backdating contracts and making use of encrypted messaging apps set to car-delete to stay clear of a paper path.

“This person stole billions of pounds from thousands of persons,” Rein mentioned, as he shut his statement.  

The prosecution’s 2nd witness was Adam Yedidia, who achieved Bankman-Fried in higher education at the Massachusetts Institute of Technologies. The pair remained good good friends.

Yedida in-depth his experience functioning to start with as a trader at Alameda for two months in 2017, and later as a software package engineer for FTX starting in January 2021. He mentioned he resigned from FTX the working day just before the exchange submitted for bankruptcy right after a fellow developer advised him that Alameda had utilised FTX client deposits to shell out again lenders.

Speaking swiftly and intentionally with an air of practiced nonchalance, Yedida testified that he hadn’t talked to Bankman-Fried or witnessed him in human being given that Nov. 2022.

When questioned why he was showing under an immunity buy, Yedida mentioned he was anxious that as an FTX developer, he “might have unwittingly created code that contributed to a criminal offense.”

Prosecutors received by a 50 percent hour of testimony in advance of breaking for the working day. The government will go on its questioning of Yedida at 9:30 A.M. on Thursday.

 FTX co-founder Gary Wang will also be having the stand this 7 days for the government.

Enjoy: Sam Bankman-Fried felony trial commences in New York

Sam Bankman-Fried criminal trial begins in New York

Supply link