Sam Bankman-Fried Ran 'Pyramid of Deceit,' Prosecutor Says in Closing Argument; Defense Calls Case Against FTX Founder a Fantasy

NEW YORK — The criminal trial of Sam Bankman-Fried, tied to the collapse of the FTX crypto exchange once valued at $32 billion, entered its final moments Wednesday as prosecution and defense attorneys battling in a Manhattan courtroom gave their closing arguments.

Their interpretations differed, of course.

Bankman-Fried "told a story, and he lied to you," a federal prosecutor told jurors about the FTX founder.

Bankman-Fried's lawyer, Mark Cohen, disagreed, replying that the government spun a Hollywood tale about FTX that strayed from reality. "Any good movie needs a villain," he said. "A nerdy high school math guy" like Bankman-Fried doesn't make a good villain, he added, so prosecutors manufactured one.

Read more: Sam Bankman-Fried on Verge of Tears as His Lawyer Concludes Defense

The lawyers spent Wednesday walking the jury through about a month of testimony and hundreds of pieces of evidence. Bankman-Fried faces two counts of wire fraud and five counts of conspiracy tied to the operation and collapse of the FTX crypto exchange and Alameda Research, the trading firm founded by Bankman-Fried that is alleged to have stolen a huge amount of money from FTX customers. Jurors could begin deliberating Bankman-Fried's fate as soon as Thursday.

Assistant U.S. Attorney Nicholas Roos, who is presenting the U.S. Department of Justice's denouement, opened by noting that there was "no dispute" that billions of dollars worth of FTX customer funds was gone.

"This is a pyramid of deceit by the defendant built on lies and false promises," he said.

Bankman-Fried's lawyer disputed this characterization early in his own closing statement. The government's movie-villain depiction of Bankman-Fried was built on the "false premise" that the FTX crypto empire was fraudulent "from the jump," he said.

"We've got evidence of [Bankman-Fried's] hair, his clothes … his sex life," Cohen said, but these things have "nothing to do with how his exchange worked" or whether he committed crimes.

While "FTX sure should've had a better-built-out risk management system," Cohen said, his client acted "in good faith," and he reminded jurors that this is "a complete defense to all the charges in this case."

'The defendant is responsible'

Roos, the prosecutor, 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 that 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 a billion dollars of FTX users' money to repurchase stock from 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 involvment 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 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."

The defense's emotional closing argument

Bankman-Fried appeared to be on the verge of tears late Wednesday at the end of his attorney's closing remarks, the former FTX CEO's last, best hope for acquittal, or at least a hung jury.

Cohen spent several hours poking holes in the government's depiction of Bankman-Fried, and he placed special focus on sowing doubt in the credibility of key government witnesses Ellison, Singh and Wang – all of whom took government plea agreements that could drastically reduce their sentences in exchange for their cooperation. "In a three-and-a-half-hour summation the government didn't mention their cooperation agreements at all," Cohen remarked.

He also reminded the jury that Bankman-Fried had at one point pondered shutting down Alameda. Bankman-Fried ultimately reasoned in a memo that the firm would be too difficult to unwind – evidence, according to Roos' argument earlier in the day, that the firm had borrowed too much money from FTX customer funds that it was unable to repay. Cohen took an alternate view: "If Sam is a criminal mastermind and Alameda is the key to the fraud to stealing customer money, why would he be the one proposing to close it in the first place?"

"Sam did his best to start and operate two multi-billion-dollar businesses in a new market," Cohen said at the conclusion of his emotionally charged remarks to jurors.

"Some decisions turned out well," he added. "Some decisions turned out poorly."

At the end of the proceeding, which stretched past 6 p.m., he offered an appeal for the jury to find Bankman-Fried acted in "good faith" throughout his time running FTX and Alameda, and therefore could not be convicted of fraud.

Cohen asked the jury to consider the real world when they begin their deliberations. In Cohen's telling, it was "real world miscommunications," "mistakes," and "delays" that imperiled FTX and the rest of Bankman-Fried's crypto empire – not intentional acts of fraud.

Bankman-Fried spent these final few moments of his team's closing arguments, a ramrod stillness replacing his usual jitters. He stared at his parents, blinking heavily and drinking big gulps of water. Sitting a few rows back in the gallery, Joseph Bankman and Barbara Fried appeared similarly taken by the proceedings.

As Bankman-Fried walked out of the courtroom on Wednesday evening, his mother watched. Sullen and steely-eyed throughout the trial, she uncrossed her crossed arms, palmed her heart and then sunk her face into her hands.