FTX Trial Commences with DOJ Branding It a “House of Cards”, Defense Spotlights Caroline Ellison

FTX Trial Commences with DOJ Branding It a “House of Cards”, Defense Spotlights Caroline Ellison

The trial against FTX founder Sam Bankman-Fried has begun. The DOJ accuses him of deceiving customers, while the defense argues he acted in good faith, blaming external factors, including former employee Caroline Ellison.

Key Takeaways

  • DOJ criticizes Sam Bankman-Fried’s FTX as a fraudulent operation, based on deceit and mismanagement of funds.
  • Defense contends that Bankman-Fried was overwhelmed by rapid company growth and implicates ex-employee Ellison.
  • Customer Marc-Antoine Julliard testifies about losing $134,000, highlighting tweets claiming FTX’s solvency.
  • The defense claims the government cherry-picks statements and underscores Bankman-Fried’s commitment to his ventures.

The trial of Sam Bankman-Fried, founder of the crypto exchange FTX, took a dramatic start yesterday in New York. The U.S. Department of Justice (DOJ) portrayed FTX as a “house of cards built on a lie,” while the defense presented Bankman-Fried as acting in good faith and diverted blame towards Caroline Ellison, a former employee.


Assistant U.S. Attorney Nathan Rehn laid out accusations against Bankman-Fried, stating that the prosecution would substantiate claims that he misled customers, rerouting their funds to Alameda Research, and utilizing these for personal and political purposes. Additionally, Rehn accused Bankman-Fried of siphoning over $10 billion from FTX to square away debts for Alameda Research and attempting to mask this through the creation of falsified financial statements.

On the other side, attorney Mark Cohen led the defense by asserting that Bankman-Fried had no intention of misappropriating funds. He contended that the FTX founder was submerged by the swift ascent of both FTX and Alameda Research and cast some of the blame onto Caroline Ellison, who has pleaded guilty and is set to testify.

A notable moment in the trial came from the testimony of Marc-Antoine Julliard, a commodities trader based in London, who incurred a loss of approximately $134,000 owing to FTX’s downfall. He underscored his due diligence via research and pointed to Bankman-Fried’s tweets asserting the exchange’s financial stability. Yet, his attempts to withdraw funds on November 8, 2022, were futile.

The defense targeted the government’s argumentative strategy, stating that it decontextualizes statements and emphasized Bankman-Fried’s relentless effort amidst the rapid expansion of his ventures. They highlighted his continued majority ownership and involvement in Alameda Research’s business decisions.

As the trial persists, a taut narrative unfolds: The DOJ is resolute on proving Bankman-Fried knowingly misled investors, whereas the defense seeks to showcase the FTX collapse as not his misdoing, instead focusing on external elements, inclusive of Caroline Ellison’s actions.


This ongoing trial underscores the complexities and challenges within the rapidly-evolving cryptocurrency industry. The overarching question of transparency, ethical management of client funds, and the impact of individual actions on investors’ financial stability are brought to the forefront. For market participants, this trial can serve as a significant touchstone, reflecting the imperative for robust regulatory frameworks and ethical standards within the cryptocurrency and broader financial space. It is pivotal to note that amidst technological and financial advancements, the perennial principles of trust and integrity remain pivotal in the evolving narratives of financial institutions and markets.