Chelsea Jia Feng
- Sam Bankman-Fried's lawyer tried to blame Caroline Ellison for FTX's collapse during opening statements.
- The attorney also painted Bankman-Fried as a "math nerd" and pointed to the volatility of crypto.
- The criminal trial kicked off on Tuesday.
Sam Bankman-Fried's defense attorney, Mark Cohen, took aim at the FTX cofounder's ex-girlfriend, Caroline Ellison, during his opening statements in the criminal trial over the collapse of FTX on Wednesday.
Cohen argued that Bankman-Fried had trusted Ellison, the former CEO of FTX sister company Alameda Research, to run the company and install safeguards when investing funds that had been wired between the two.
And, according to Cohen, as crypto prices were falling, Bankman-Fried urged Ellison to hedge Alameda Research's positions and protect it from losing a lot of money. But, Cohen said, Ellison didn't listen.
Bankman-Fried is on trial in Manhattan federal court on charges that he defrauded FTX customers and investors out of billions of dollars.
Ellison's lawyer did not immediately respond to a request for comment from Insider.
Ellison was in an on-and-off again relationship with Bankman-Fried for at least three years, according to a recent biography on the FTX cofounder.
Ellison, who has already pled guilty to fraud charges and has been cooperating with investigators since December, is expected to be a star witness in the criminal trial.
What's more, Bankman-Fried has attempted to put the blame for the platform's collapse on Ellison and other executives in the past. He even leaked entries from Ellison's private diary to The New York Times in July.
Cohen also said Wednesday that Bankman-Fried believed the company would be able to pay lenders back on time in full and had "acted in good faith and took reasonable business measures."
During his statements, Bankman-Fried's attorney painted the former FTX CEO as a "math nerd," who'd failed to factor in risk management, Reuters reported.
The lawyer also emphasized the volatility of the crypto market, which he said was a major wildcard for startups like FTX.
"It's not a crime to run a business," Cohen said.
Meanwhile, prosecutor Thane Rehn told the jury that Bankman-Fried stole more than $10 billion from FTX customers, all while telling customers they could access their money at any time.
"When customers put money in FTX, he stole it. when they put crypto in, he stole that too," Rehn said.
The trial kicked off on Tuesday and could take as long as six weeks. Bankman-Fried is facing seven charges of fraud. If convicted, he could face a hefty prison sentence.