Was FTX an empire ‘built on lies’ or a startup that ‘grew too quickly’?

The criminal trial of former cryptocurrency magnate Sam Bankman-Fried completed its second day on Wednesday. The prosecution and defense both gave opening statements, and interviewed the first two witnesses, including a customer of FTX and Bankman-Fried’s former friend and ex-Alameda and FTX employee Adam Yedidia.

The prosecution painted Bankman-Fried as someone who knowingly committed fraud to achieve great wealth, power and influence. The defense countered that Bankman-Fried acted in good faith, never meant to commit fraud or steal, and basically got in over his head.

The prosecution: Bankman-Fried’s empire was ‘built on lies’

In his opening argument, just half-past noon, the prosecutor Thane Rhen had began by painting a picture. “One year ago, Bankman-Fired was on top of the world.” 

And for what it’s worth, he arguably was. 

Bankman-Fried was worth billions of dollars, living in a $35 million penthouse with friends and coworkers; he had two massive businesses, a crypto exchange, FTX, and crypto hedge fund, Alameda Research (both of which have since gone bankrupt.)

“He had wealth, he had power, he had influence,” Rhen said. “But all of it was built on lies.”  

Rhen alleged that Bankman-Fried “took money he didn’t have” to build an empire. Rhen repeated several times, and loudly, that Bankman-Fried stole “billions of dollars” from FTX customers so he could spend the money on “lavish houses for himself, his parents, and his friends,” gain influence in Washington and meet celebrities.