Sam Bankman-Fried lawyer says government portrayed FTX founder as a ‘monster’
FTX Founder Sam Bankman-Fried leaves Manhattan Federal Court after a court appearance on June 15, 2023 in New York City.
Michael M. Santiago | Getty Images
As lawyers in Sam Bankman-Fried’s criminal trial presented their closing arguments on Wednesday, prosecutors reminded jurors of the mountain of evidence provided by key witnesses, while defense counsel accused the government of portraying the FTX founder as a “monster.”
The prosecution kicked off the proceedings, trying to give the 12 jurors a clear sense of why they’ve spent the past four weeks sitting in a lower Manhattan courtroom.
“Almost a year ago, thousands of people from all over the world who deposited money with FTX started withdrawing funds,” Assistant U.S. Attorney Nicolas Roos told the court.
Roos said there’s “no serious dispute” that $10 billion in customer money that was sitting in FTX’s crypto exchange went missing, with some of it going to to pay for real estate, investments, loan repayments and political donations.
The main thing the jury has to decide, Roos said, is whether Bankman-Fried knew that taking the money was wrong.
“The defendant schemed and lied to get money, which he spent,” Roos said.
Bankman-Fried, the 31-year old son of two Stanford legal scholars and graduate of Massachusetts Institute of Technology, faces a potential life sentence if convicted on charges, which include wire fraud, securities fraud and money laundering, all tied to the collapse late last year of FTX and sister hedge fund Alameda Research. He pleaded not guilty.
The trial, which began in early October and is set to wrap up in the coming days, has largely pitted the testimony of Bankman-Fried’s former close friends and top lieutenants against the sworn statements of their former boss and, for many of them, former roommate.
The government’s key witnesses included Caroline Ellison, Bankman-Fried’s ex-girlfriend and the former head of Alameda, and FTX co-founder Gary Wang, who was Bankman-Fried’s childhood friend from math camp. Both pleaded guilty in December to multiple charges and cooperated as witnesses for the prosecution.
FTX founder Sam Bankman-Fried is questioned by prosecutor Danielle Sassoon (not seen) during his fraud trial over the collapse of the bankrupt cryptocurrency exchange at federal court in New York City, U.S., October 31, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
When it was time for Bankman-Fried’s team to mount a defense, lead counsel Mark Cohen left the bulk of the case to his client, who spent three days on the stand telling the jury that he didn’t defraud anyone, didn’t take customer money and tried to work with his deputies to keep FTX from failing.
Roos spent Wednesday morning asking the jury to look at the evidence. At one point, he asked, “Who is responsible? He then stepped out from behind the podium and towards the defense table, pointed at the defendant and said, “This man, Samuel-Bankman-Fried.”
“A pyramid of deceit was built by the defendant,” Roos said. “That ultimately collapsed.”
The facts, as listed by Roos, were that customers believed their deposits were their own and not to be used by anyone else; that FTX ads continually said the exchange was the safest and easiest way to buy cryptocurrency; and that $10 billion was missing.
‘Uncomfortable to hear’
Roos told the jury that Bankman-Fried lied to them, reminding them how smooth the defendant was in answering questions from his own attorney but how “he was a different person” when it was the prosecutors’ turn. He had a perfect memory on Friday, Roos said, telling the jury that Bankman-Fried knew the details about the layout of his Airbnb office in California, the reason he went to Hong Kong and why he picked the Miami Heat arena as the one for FTX to sponsor.
That all changed when the government was asking the questions.
“It was uncomfortable to hear,” Roos said, adding that Bankman-Fried said “I can’t recall” over 140 times during questioning by the government.
“To believe his story, you’d have to ignore the evidence,” Roos said. “You’d have to believe the defendant, who graduated from MIT and built two multibillion-dollar companies, was actually clueless.”
Critical to the failure of FTX was the use of customer funds to cover losses in Alameda’s books following the plunge in crypto prices last year. Roos said Bankman-Fried is the one who gave special privileges to Alameda, which he started before founding FTX, allowing it to siphon customer money. He knew it was wrong, Roos said, which is why he kept it secretive.
Roos said Bankman-Fried had been lying to the public about Alameda’s “secret advantages,” and was being untruthful when he told the public and the media that Alameda was just like everyone else.
“Those were lies,” Roos said. Had they known the truth, “investors would have run for the exits,” he said.
Bankman-Fried blamed “messy accounting,” Roos said, adding “give me a break.” He said those comments contradicted what he told Congress, that he’d reconciled the books.
Judge Lewis Kaplan, who presided over the trial, started court almost a half hour late on Wednesday because a juror was stuck in traffic. Then there were technical issues, as the second row of monitors in the jury box stopped working. That led to a 1- minute break.
Later in Roos’s closing, he brought up the infamous spreadsheet of the seven alternate versions of Alameda’s finances that Ellison had put together when third-party lenders were asking for an update. Bankman-Fried testified that he’d seen a spreadsheet but didn’t remember the details and didn’t ask Ellison questions about it. Roos called the explanation “implausible.”
FTX founder Sam Bankman-Fried is questioned by defense lawyer Mark Cohen as he testifies in his fraud trial over the collapse of the bankrupt cryptocurrency exchange, at federal court in New York City, U.S., October 30, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
Roos referred to metadata showing that Bankman-Fried was part of a meeting for about 30 minutes where the hole in FTX’s balance sheet and repaying lenders were discussed. Metadata shows he was studying the Google Doc of the company’s finances, with numbers indicating the billions in borrowing from FTX.
Roos brought up testimony from three firsthand witnesses who said that they’d spoken with Bankman-Fried about the giant hole in the balance sheet. Ellison said there was no way to repay it, and Singh testified that Bankman-Fried admitted to him that “we are a little short on deliverables.”
Bankman-Fried “had the arrogance to think he could get away with it,” Roos said.
Spending freely
Another point speaking to the defendant’s intent, Roos said, was his tweeting.
Bankman-Fried’s plan last November, when he knew there was only enough money to process one-third of client assets, was to send a confident tweet thread. Singh testified that he wasn’t comfortable with the plan, yet Bankman-Fried went on to tweet that “assets are fine” as the bank run was underway, Roos said.
Bankman-Fried knew Alameda had a negative net asset value of $2.7 billion, Roos said, but wanted to make another $3 billion in venture investments. The only way to do that was with FTX customer funds, he said.
Additionally, Roos told the jury, client money went to $100 million in real estate expenses, including a $30 million penthouse in the Bahamas and $16 million for his parents’ home.
In referencing the Super Bowl picture with Katy Perry and others, Roos called Bankman-Fried a “celebrity chaser.”
Roos walked the jury through a timeline of key moments, as follows:
- On Sept. 1, Bankman-Fried saw that FTX had a $13.7 billion hole.
- On Sept. 7, Bankman-Fried wrote a long memo proposing the shutdown of Alameda. Still, he spent $45 million for a stake in Skybridge Capital.
- Then, on Sept. 22, he paid $4 million to himself.
- Four days later, he sent $250 million to Modulo Capital, a hedge fund in the Bahamas.
- And on Oct. 3, he funneled $6 million for political donations.
“That’s all you need to know to find him guilty,” Roos said.
In closing the prosecution’s case, Roos referenced the seven charges facing Bankman-Fried and why he can be convicted of each.
In highlighting counts three and four, which charge the defendant with wire fraud against Alameda’s lenders, Roos emphasized the importance of Bankman-Fried’s knowledge of the alternative balance sheet. For count five, conspiracy to commit securities fraud on FTX investors, the primary evidence came from investors who expressed concern about a conflict of interest between Alameda and FTX and who said they wouldn’t have put in money if they knew the truth. Bankman-Fried also lied about revenue, Roos said.
The prosecution reminded the court that Bankman-Fried directed losses to be shifted to Alameda and that FTX’s insurance fund had made up numbers. Add it all up, Roos said, and it debunks the defense’s main argument that Bankman-Fried acted in good faith and believed everything would work out.
“This was a fraud that occurred on a massive scale,” he said.
‘Every movie needs a villain’
Following the government’s closing argument, Cohen began his statements at a little before 3 p.m. He said the government is portraying Bankman-Fried as a “monster” and depicting him as a “villain” and a “bad guy.” Lawyers brought out testimony about his sex life and showed photos of him “looking awkward with celebrities,” Cohen said.
He said Bankman-Fried would talk to just about anyone who would listen, behavior that could make life messy but isn’t criminal. He said the prosecution has made the case into a “movie,” and the defense is showing what it’s like in the real world, where things are messy.
“Every movie needs a villain,” Cohen said.
He claimed the case against his client was built on the false premise that FTX was a fraudulent enterprise to intentionally steal customer funds.
Cohen broke the case up into two time periods. The first was 2019 to 2021, when there’s no indication of criminal intent. Up until June 2022, everyone involved thought they were operating the most successful crypto exchange in the world, Cohen said.
The second period was from June to November of 2022. Crypto winter had led to the failure of a number of businesses in the industry. That’s the first time it became clear that Alameda was using customer funds. In the fall of that year, Bankman-Fried saw a liquidity problem, not a solvency problem, Cohen said. He always thought there were sufficient funds on and off the exchange.
While FTX’s lack of a risk management system or chief risk officer reflected poor system controls, bad business decisions aren’t crimes, Cohen said.
The government carries the heavy burden of proving Bankman-Fried operated with criminal intent, and “it has not,” Cohen said. He said that prosecutors called Bankman-Fried “evil” and “arrogant” and described him as a “criminal mastermind.” But in getting into specific actions, “there’s nothing wrongful about margin trading,” he said.
Cohen said his client provided the court with good faith answers about what he remembered, and asked why a criminal mastermind would go speak in front of Congress. He described the government’s assumptions as “heads I win, tales you lose.”
With the defense continuing its closing argument, Judge Kaplan said the jury will likely be asked to stay late on Wednesday.
— CNBC’s Dawn Giel contributed to this report.
Microsoft CEO Satya Nadella speaks at the Axel Springer building in Berlin on Oct. 17, 2023. He received the annual Axel Springer Award.
Ben Kriemann | Getty Images
Among the thousands of Microsoft employees who lost their jobs in the cutbacks announced this week were 830 staffers in the company’s home state of Washington.
Nearly a dozen game design workers in the state were part of the layoffs, along with three audio designers, two mechanical engineers, one optical engineer and one lab technician, according to a document Microsoft submitted to Washington employment officials.
There were also five individual contributors and one manager at the Microsoft Research division in the cuts, as well as 10 lawyers and six hardware engineers, the document shows.
Microsoft announced plans on Wednesday to eliminate 9,000 jobs, as part of an effort to eliminate redundancy and to encourage employees to focus on more meaningful work by adopting new technologies, a person familiar with the matter told CNBC. The person asked not to be named while discussing private matters.
Scores of Microsoft salespeople and video game developers have since come forward on social media to announce their departure. In April, Microsoft said revenue from Xbox content and services grew 8%, trailing overall growth of 13%.
In sales, the company parted ways with 16 customer success account management staff members based in Washington, 28 in sales strategy enablement and another five in sales compensation. One Washington-based government affairs worker was also laid off.
Microsoft eliminated 17 jobs in cloud solution architecture in the state, according to the document. The company’s fastest revenue growth comes from Azure and other cloud services that customers buy based on usage.
CEO Satya Nadella has not publicly commented on the layoffs, and Microsoft didn’t immediately provide a comment about the cuts in Washington. On a conference call with analysts in April, Microsoft CFO Amy Hood said the company had a “focus on cost efficiencies” during the March quarter.
WATCH: Microsoft layoffs not performance-based, largely targeting middle managers
Technology
IPO market gets boost from Circle’s 500% surge, sparking optimism that drought may be ending
Jeremy Allaire, CEO and co-founder of Circle Internet Group, the issuer of one of the world’s biggest stablecoins, and Circle Internet Group co-founder Sean Neville react as they ring the opening bell, on the day of the company’s IPO, in New York City, U.S., June 5, 2025.
NYSE
For over three years, venture capital firms have been waiting for this moment.
Tech IPOs came to a virtual standstill in early 2022 due to soaring inflation and rising interest rates, while big acquisitions were mostly off the table as increased regulatory scrutiny in the U.S. and Europe turned away potential buyers.
Though it’s too soon to say those days are entirely in the past, the first half of 2025 showed signs of momentum, with June in particular producing much-needed returns for Silicon Valley’s startup financiers. In all, there were five tech IPOs last month, accelerating from a monthly average of two since January, according to data from CB Insights.
Highlighting that group was crypto company Circle, which more than doubled in its New York Stock Exchange debut on June 5, and is now up sixfold from its IPO price for a market cap of $42 billion. The stock got a big boost in mid-June after the Senate passed the GENIUS Act, which would establish a federal framework for U.S. dollar-pegged stablecoins.
Venture firms General Catalyst, Breyer Capital and Accel now own a combined $8 billion worth of Circle stock even after selling a fraction of their holdings in the offering. Silicon Valley stalwarts Greylock, Kleiner Perkins and Sequoia Capital are set to soon profit from Figma’s IPO, after the design software vendor filed its public prospectus on Tuesday. Since its $20 billion acquisition agreement with Adobe was scrapped in late 2023, Figma has been one of the most hotly anticipated IPOs in startup land.
It’s “refreshing and something that we’ve been waiting for for a long time,” said Eric Hippeau, managing partner at early-stage venture firm Lerer Hippeau, regarding the exit environment. “I’m not sure that we are confident that this can be a sustained trend yet, but it’s been very encouraging.”
Another positive sign for the industry the past couple months was the performance of artificial infrastructure provider CoreWeave, which went public in late March. The stock was relatively stagnant for its first month on the market but shot up 170% in May and another 47% in June.
For venture firms, long considered the lifeblood of risky tech startups, IPOs are essential in order to generate profits for the university endowments, foundations and pension funds that allocate a portion of their capital to the asset class. Without handsome returns, there’s little incentive for limited partners to put money into future funds.
After a record year in 2021, which saw 155 U.S. venture-backed IPOs raise $60.4 billion, according to data from University of Florida finance professor Jay Ritter, every year since has been relatively dismal. There were 13 such offerings in 2022, followed by 18 in 2023 and 30 last year, collectively raising $13.3 billion, Ritter’s data shows.
The slowdown followed the Federal Reserve’s aggressive rate-hiking campaign in 2022, meant to slow crippling inflation. As the lower-growth environment extended into years two and three, venture firms faced increasing pressure to return cash to investors.
‘Backlog of liquidity’
In its 2024 yearbook, the National Venture Capital Association said that even with a 34% increase in U.S. VC exit value last year to $98 billion, that number is 87% below the 2021 peak and less than half the average for the four years from 2017 through 2020. It’s a troubling dynamic for the 58,000 venture-backed companies that have raised a total of $947 billion from investors, according to the annual report, which is produced by the NVCA and PitchBook.
“This backlog of liquidity drought risks creating a ‘zombie company’ cohort — businesses generating operational cash flow but lacking credible exit prospects,” the report said.
Other than Circle, the latest crop of IPOs mostly consists of smaller and lesser-known brands. Health-tech companies Hinge Health and Omada Health are valued at about $3.5 billion and $1 billion, respectively. Etoro, an online trading platform, has a market cap of just over $5 billion. Online banking provider Chime Financial has a higher profile due largely to a years-long marketing blitz and is valued at close to $11.5 billion.
Meanwhile, the highest valued private companies like SpaceX, Stripe and Databricks remain on the sidelines, and AI highfliers OpenAI and Anthropic continue to raise massive amounts of cash with no intention of going public anytime soon.
Still, venture capitalists told CNBC that there are plenty of companies with the financial metrics to be public, and that more of them are readying for the process.
“The IPO market is starting to open and the VC world is cautiously optimistic,” said Rick Heitzmann, a partner at venture firm FirstMark in New York. “We are preparing companies for the next wave of public offerings.”
There are other ways to make money in the meantime. Secondary sales, a process that involves selling private shares to new investors, are on the rise, allowing early employees and investors to get some liquidity.
And then there’s what Mark Zuckerberg is doing, as he tries to position his company at the center of AI innovation and development.
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event on Wednesday, Sept. 25, 2024.
Bloomberg | Bloomberg | Getty Images
Last month, Meta announced a $14 billion bet on Scale AI, taking a 49% stake in the AI startup in exchange for poaching founder Alexandr Wang and a small group of his top engineers. The deal effectively bought out half of the stock owned by investors, leaving them with the opportunity to make money on the rest of their holdings, should a future acquisition or IPO take place.
The deal is a big win for Accel, which led Scale AI’s Series A round in 2017, and is poised to earn more than $2.5 billion in the transaction. Index Ventures led the Series B in 2018, and Peter Thiel’s Founders Fund led the Series C the following year at a valuation of over $1 billion.
Investors now hope the Federal Reserve will move toward a rate-cutting campaign, though the central bank hasn’t committed to one. There’s also ongoing optimism that regulators will make going public less burdensome. Last week, Reuters reported, citing sources familiar with the matter, that U.S. stock exchanges and the SEC have discussed loosening regulations to make IPOs more enticing.
Mike Bellin, who heads consulting firm PwC’s U.S. IPO practice, said he anticipates a diversity of IPOs across sectors in the second half of the year. According to data from PwC, pharma and fintech were among the most active sectors for deals through the end of May.
While the recent trend in IPO activity is an encouraging sign for investors, potential roadblocks remain.
Tariffs and geopolitical uncertainty delayed IPO plans from companies including Klarna and StubHub in April. Neither has provided an update on when they plan to debut.
FirstMark’s Heitzmann said the path forward is “not at all clear,” adding that he wants to see a strong quarter of economic stability and growth before confidently saying that the market is wide open.
Additionally, other than CoreWeave and Circle, recent tech IPOs haven’t had big pops. Hinge Health, Chime and eToro have seen relatively modest gains from their offer price, while Omada Health is down.
But virtually any activity beats what VCs were experiencing the last few years. Overall, Hippeau said recent IPO trends are generally encouraging.
“There’s starting to be kind of light at the end of the tunnel,” Hippeau said.
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