Sam Bankman-Fried built a ‘pyramid of deceit,’ prosecutor concludes during closing arguments

FTX founder Sam Bankman-Fried built a “pyramid of deceit” and knowingly swindled customers out of billions of dollars to fund a lavish lifestyle and party with celebrities, federal prosecutors said Wednesday in their closing argument against the former crypto king.

Assistant United States Attorney Nicolas Roos gave his final pitch to 12 New York jurors and alternates who have sat through nearly four weeks of testimony about the collapse of Bankman-Fried’s cryptocurrency exchange as well as Alameda Research, the crypto hedge fund he also owned.

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FTX was one of the biggest players in the crypto industry and was considered a survivor following a market crash that had bankrupted a number of other firms. About a year ago, thousands of customers tried to withdraw their investments which left the company scrambling to raise funds to cover an $8 billion shortfall. It was discovered that FTX’s trading firm, Alameda Research, had used the money that customers deposited at FTX, despite multiple assurances to customers made by Bankman-Fried and his top lieutenants that everything was above board, their investments were safe and that both companies were solvent.

In the end, customers lost their nest eggs in the scheme, going bankrupt and having little hope of getting their money back.

“With each additional click of the withdrawal button, their dread turned to despair,” Roos said. “Who was responsible? This man, Samuel Bankman-Fried.”

The prosecutor also showed jurors excerpts of testimony from three members of Bankman-Fried’s inner circle, all of whom pleaded guilty to similar charges and testified Bankman-Fried ultimately called the shots at FTX and Alameda, which had “secret” privileges on the exchange that were not available to others.

“The reason it’s secret is because he knows it’s wrong,” Roos said of Bankman-Fried.

The crux of the government’s cases against Bankman-Fried wasn’t whether he and his top lieutenants misappropriated billions of dollars but that they knew it was wrong.

“It’s not about technical jargon,” the prosecutor said. “It’s about deception, it’s about lies, it’s about stealing, it’s about greed.”

The government spent two weeks calling 15 witnesses to the stand. In comparison, the defense called only three, including Bankman-Fried, who faced tough pushback from Assistant U.S. Attorney Danielle Sassoon, who spent much of her time attacking his credibility and using his own words against him.

Bankman-Fried told jurors that even though he co-founded FTX, he wasn’t focused on the day-to-day duties and pushed the blame onto other executives.

He also denied knowing that billions of dollars had been misused until just a few months before the company’s collapse last November.

When asked if he had explicitly told his employees not to spend FTX customer money on investments, real estate deals, and endorsement deals, Bankman-Fried fumbled his answer. He also came up short when asked to name an employee who might have authorized the FTX funds to be used for those purposes.

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Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy tied to FTX’s implosion. If convicted of all the charges against him, he could be sentenced to more than 100 years in prison.

The defense is expected to begin its closing statement later Wednesday, with the case likely going to the jury sometime Thursday, U.S. District Judge Lewis Kaplan said.