As FTX spiralled towards bankruptcy in early November 2022, the inner circle around the crypto exchange’s founder, Sam Bankman-Fried, began to fracture.
Caroline Ellison, chief executive of FTX’s sister firm Alameda Research, was in Hong Kong and expressed relief that she would soon be released from the pressure cooker of the firm’s financial distress. Colleagues at FTX’s headquarters in the Bahamas grew concerned about head of engineering Nishad Singh’s mental health, as the full scale of the losses, and likely consequences, came into focus.
Gary Wang, Bankman-Fried’s co-founder and top lieutenant, remained stoic through the slide to bankruptcy. He finally left the penthouse that he shared with Bankman-Fried and other top FTX executives shortly after consulting with US lawyers. Wang, Ellison and Singh have all since pleaded guilty.
The quartet of one-time friends and formerly fabulously wealthy millennials are set to be reunited for the first time in a Manhattan courtroom over the coming weeks, as Bankman-Fried goes on trial for fraud. Here are some of the central figures in the most high-profile trial in the short history of cryptocurrencies.
The defendant
Sam Bankman-Fried
Sam Bankman-Fried grew up on the fringe of the Stanford University campus, the son of two respected legal scholars. He loathed school, finding it boring, but thrived in competitive maths and then at Massachusetts Institute of Technology where he studied physics. He also fell in with followers of the philosophical movement Effective Altruism, who preach philanthropy based on a mathematical assessment of the greatest good for the greatest number.
Bankman-Fried, now 31, touted charitable causes as he founded two businesses: private crypto trading firm Alameda in 2017, and then a public-facing crypto trading platform, FTX, in 2019. The success of FTX, which was backed by some of the world’s top investors, made him a billionaire and propelled him to international fame.
But after crypto prices collapsed in 2022 and a leak of Alameda’s balance sheet led to a run on FTX, Bankman-Fried yielded to pressure to put FTX in bankruptcy — a decision he says he regrets. He has defied expectation that he would plead guilty in hopes of a reduced punishment, and has repeatedly sought to get his side of the story reflected in the press while awaiting trial. He maintains FTX collapsed because of good-faith errors. Before his arrest, he prepared testimony for a congressional committee which began: “I would like to start by formally stating, under oath: I fucked up.”
The star witness
Caroline Ellison
Caroline Ellison, 28, and Bankman-Fried grew up along parallel tracks. Ellison, a child of academics at MIT, also competed in high school maths contests and then moved to California to study at Stanford. Their paths crossed as traders at Jane Street. Shortly after Bankman-Fried quit the trading firm, Ellison followed him back to California to join Alameda.
The pair became romantically involved, although the nature of their relationship was unclear. The personal turbulence meant that, at times, they barely spoke.
Still, Ellison was trusted with leading Alameda after Bankman-Fried formally stepped aside to focus on FTX, playing an important role in lending relationships that are now the focus of fraud charges. She and Wang pleaded guilty to fraud last December and agreed to co-operate with prosecutors — a fact publicised in a dramatic late-night press conference once Bankman-Fried had agreed to be extradited from the Bahamas and was on a plane to New York.
As FTX was collapsing in late 2022, she wrote to Bankman-Fried: “I just had an increasing dread of this day that was weighing on me . . . Now that it’s actually happening it just feels great to get it over with.”
The loyal lieutenant
Gary Wang
Gary Wang was, until late last year, Bankman-Fried’s stoic right-hand man. The co-founder and chief technology officer of FTX had almost no public profile. Colleagues describe barely exchanging a word with him. But he built and maintained much of the crypto exchange’s tech, while apparently trusting his old friend Bankman-Fried to run the business.
The two met at Canada-USA Math Camp, a summer programme for high school students. Both attended MIT. They joined the same co-ed fraternity, Epsilon Theta, where members indulged not in raucous parties but in marathon sessions playing strategy board games and long ethical debates. Wang left a job at Google to help start Alameda.
Prosecutors claim his central role in building FTX included inserting secret parameters into the exchange’s code that gave Alameda the right to borrow $65bn — many times more money than the exchange ever held. Wang pleaded guilty to fraud, telling the court that he made changes to FTX’s code “knowing that others were representing to investors and customers that Alameda had no such special privileges and people were likely investing in and using FTX based in part on those misrepresentations”.
The whizz kid
Nishad Singh
The youngest member of the inner circle at FTX, Nishad Singh studied at the same elite California private school as Bankman-Fried and his younger brother Gabe. As a student, he once ran a 100-mile race. After graduating from the University of California, Berkeley, he took a “dream job” at Facebook but spent evenings and weekends at Alameda’s office pitching in on Bankman-Fried’s crypto project.
He joined full-time and became the number-two engineer to Wang. Colleagues remember an energetic and personable young man, whose sunny attitude complimented Wang, the solitary genius. Singh’s pet labradoodle became a company favourite.
He pleaded guilty to fraud and campaign finance violations. “Your Honour, I’m unbelievably sorry for my role in all of this and the harm that it’s caused. I’m hoping that in accepting responsibility, assisting the government, and forfeiting assets, I can begin to make it right,” he said at the time.
The judge
Lewis Kaplan
A veteran of the Southern District of New York, Lewis Kaplan has been a federal judge since he was appointed to the court by president Bill Clinton in 1994. He has presided over numerous high-profile cases, including the first instance in which a Guantánamo Bay detainee was tried in a non-military court. Most recently, he oversaw a civil case in which the journalist E Jean Carroll successfully sued former president Donald Trump for rape, winning a $5mn payout.
“He is regarded as a very tough, no-nonsense judge, but very smart. He’s not by any means an ideologue,” said Bradley Simon, a criminal defence partner at Schlam Stone & Dolan. He added that Kaplan — who will often congratulate lawyers if he finds their arguments impressive, and who has a penchant for self-deprecating jokes — “doesn’t suffer fools gladly”.
Kaplan has thus far largely sided with the government on pre-trial motions, and has occasionally expressed his exasperation with Bankman-Fried over his bail conditions. He has also repeatedly refused applications from lawyers for Bankman-Fried, who had his bail revoked in August, to temporarily leave jail in order to better prepare for his trial.
The defence lawyers
Mark Cohen and Christian Everdell
Bankman-Fried has two formidable former federal prosecutors in his corner. Mark Cohen started his own firm more than 20 years ago and has defended Jeffrey Epstein associate Ghislaine Maxwell, among others. A former colleague calls him “one of the most respected attorneys” in the white-collar bar, renowned for his command of the law as well as his careful and considered arguments.
His co-counsel Christian Everdell, who also worked on the Maxwell case, was part of the team who brought down the Mexican drug kingpin Joaquín “El Chapo” Guzmán Loera before entering private practice.
While both have steadfastly fought Bankman-Fried’s corner, Cohen has hinted at a divergence of opinion between him and his client over the best way to prepare a defence. When hauled in front of Kaplan in July after prosecutors accused Bankman-Fried of attempting to intimidate witnesses by leaking communications with his former colleague Ellison to The New York Times, Cohen conceded that his client’s actions “may or may not be the best strategy” but that he “had the right” to “protect his reputation”.
Cohen and Everdell may have to contend with Bankman-Fried taking the stand in his own defence — a move lawyers tend to advise against.
The prosecutors
Nick Roos and Danielle Sassoon
The prosecution team in the case against Bankman-Fried has at various points included as many as eight different assistant US attorneys, but most of the key briefs and arguments have been spearheaded by Nick Roos, who co-led the team that won the conviction of Nikola Motors founder Trevor Milton, and Danielle Sassoon, a rising star in an office that brings some of the biggest criminal cases in the country.
After a swift indictment of Bankman-Fried, Roos and Sassoon have had to contend with some bumps in the road, including repeated tightening of the defendant’s bail conditions. They also ran into an unexpected challenge from the Bahamas, which suggested it may object to a campaign finance violation charge brought against Bankman-Fried after it had agreed to extradite him to the US. That charge was dropped, while five others, including the alleged bribery of a foreign official, were severed for a separate trial in March.
The government has not revealed who it will put up for opening and closing arguments, or who will examine star witnesses. But Roos, who has developed a reputation for tackling financially complex topics, and Sassoon, who once clerked for Antonin Scalia on the Supreme Court, could be tasked with simplifying the crypto universe for the jury by focusing on Bankman-Fried’s alleged fraud, rather than the nuances of distributed ledgers.
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