The long-awaited insider trading trial of Sam Bankman-Fried is finally underway, and the first few weeks have been filled with some pretty interesting developments. For those who may be unfamiliar, Bankman-Fried is a prominent quant trader and the CEO of Alameda Research, one of the world’s largest cryptocurrency trading firms.
At the heart of the trial is the allegation that Bankman-Fried and his associates used inside information to secure a profitable trade on the cryptocurrency exchange FTX back in October 2019. Such action is illegal in the United States, and if proven guilty, Bankman-Fried will face criminal charges.
The trial kicked off on April 12th with Bankman-Fried’s lead attorney, Alonzo Wickers, delivering his opening statement. In his speech, Wickers argued that Bankman-Fried had done nothing wrong, describing the alleged insider trading incident as “a non-event.” Wickers also stated that Bankman-Fried’s actions were in line with the rules of FTX and therefore should not be seen as wrongdoings.
Shortly afterward, the prosecution made their case, arguing that Bankman-Fried had used his privileged access to the cryptocurrency market to his own advantage. The prosecution argued that Bankman-Fried had seen the opportunity to make a large, timely profit and had acted on the information.
The trial shifted to the testimony of witnesses soon after and the first two witnesses were members of FTX’s staff. Both individuals provided valuable insight into Bankman-Fried’s activities and business practices. This gave the prosecution more fuel to continue their argument that Bankman-Fried had acted on insider knowledge to secure his profitable trade.
Another witness called to testify was Bankman-Fried’s Quant Strategist, Mark Young. Young provided further evidence of what the defense was arguing, that Bankman-Fried had done nothing wrong and had simply acted in accordance with the rules of FTX.
The trial intercepted even more excitement when Bankman-Fried himself took the stand. During his testimony, Bankman-Fried told the jury and judge that he had a fiduciary duty to his employer and his investors to make sure that they earned a maximal return on investments. He argued that he had taken every possible step to ensure that his trades were in line with all regulations.
The trial is ongoing and no verdict has yet been decided. However, what we have seen in the first few weeks already provides many interesting pieces of evidence and insight. Whether or not Bankman-Fried will be found guilty remains to be seen, but for the time being, the trial is sure to remain one of the most talked-about events of the year.
