Federal prosecutors claimed Sam “SBF” Bankman-Fried “doubled down” on utilizing prospects’ funds when he bought Binance’s $2 billion stake in FTX in 2021. In accordance with United States authorities attorneys, Bankman-Fried paid for the buyout with funds from FTX prospects.
The prosecution is delivering its closing arguments on Nov. 1 on the Southern District Courtroom of New York, the place Bankman-Fried’s trial has been happening since Oct. 3. Jurors within the case reportedly heard from Assistant U.S. Legal professional Nicolas Roos:
“The defendant had a selection: Come clear or double down? He doubled down. Right here’s when he doubled down. He used buyer cash to purchase again FTX’s inventory from Binance. […] It value $2 billion.”
In 2019, Binance invested in FTX by way of a strategic partnership. Two years later, in 2021, Bankman-Fried sought to purchase again FTX’s shares, paying its competitor $2.1 billion in Binance’s BUSD stablecoin and FTX Token (FTT).
Moreover, prosecutors went by way of different funds and purchases allegedly made by FTX with buyer funds, together with thousands and thousands of {dollars} in political donations, luxurious actual property within the Bahamas, and enterprise capital investments.
“He spends on K5 — right here is the cost doc, signed by the defendant. Nishad Singh stated it was a nasty concept. The man who ran K5 hung round with celebrities,” Roos stated in reference to K5 Ventures, a enterprise capital fund centered on early-stage startups.
K5 entities acquired $700 million in funding from FTX in 2022. Alameda Analysis, FTX’s sister firm, additionally invested $300 million in K5 International. In accordance with prosecutors, FTX’s buyer deposits had been the supply of the funds. Roos continued:
“The defendant is aware of Alameda can’t repay the debt. Nishad sees the large gap and freaks out. The defendant, not a lot. He has come to phrases with it. He needed to make use of the cash. He did use the cash. He had the conceitedness to suppose he’d get away with it.”
Bankman-Fried’s protection has argued that FTX’s personal funds — whose income swelled from $89 million in 2020 to $1.02 billion in 2021 — had been used for enterprise investments, political contributions and property purchases. In accordance with his protection group, the $8 billion hole between FTX and Alameda Analysis was attributable to a scarcity of threat administration and buying and selling errors by Alameda.
Bankman-Fried faces seven counts of fraud and conspiracy to commit fraud and will spend as much as 115 years in jail if discovered responsible. The protection is predicted to start its closing arguments on Nov. 1, simply earlier than the jury renders its ultimate verdict.
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