Indexbit-SBF on trial: A 'math nerd' in over his head, or was his empire 'built on lies?'

The Indexbittrial of disgraced crypto mogul Sam Bankman-Fried kicked off in earnest Wednesday with lawyers from both sides delivering their opening statements.

"He had wealth. He had power. He had influence," said Nathan Rehn, an assistant U.S. attorney for the Southern District of New York. "But all of that — all of that — was built on lies."

Rehn charted the rise and equally dramatic fall of Bankman-Fried's crypto empire, which include the cryptocurrency exchange FTX and a crypto-focused hedge fund, called Alameda Research.

"A year ago, it looked like Sam Bankman-Fried was sitting on top of the world," Rehn said, nodding to Bankman-Fried's lavish lifestyle.

High-flying lifestyle in a $30 million Bahamas apartment

Bankman-Fried lived in a $30 million apartment in The Bahamas, and he traveled all over the world on private planes. Rehn noted Bankman-Fried hung out with actors, athletes, and politicians.

Rehn detailed how Bankman-Fried took money from FTX customers "to make himself even richer." He bought property for family, friends, and himself, and he made speculative investments.

Bankman-Fried's crypto company was like a huge piggy bank, the prosecution alleges. At any time, Bankman-Fried could — and did — use money from FTX customers.

Bankman-Fried, who has been jailed for more than a month, appeared to pay close attention. He took notes on a laptop he is permitted to use during the trial.

A "math nerd" from MIT

His lead attorney, Mark Cohen, pushed back on that narrative which suggested that Bankman-Fried is a villain. . He said FTX in its infancy was growing at an unimaginable pace, "like building a plane as you're flying it."

"Sam didn't defraud anyone," he said. "Sam did not steal from anyone. He did not intend to steal from anyone."

Cohen criticized the government for displaying a photograph to the jury of Bankman-Fried in what was his trademark look before he was sent to jail in August: shorts and a t-shirt, with unkempt hair.

Cohen sugested Bankman-Fried was actually "a math nerd" who went to MIT. He was someone, he added, "who didn't drink or party."

Cooperating witness was former girlfriend

After Bankman-Fried was arrested in December, prosecutors filed criminal charges against four members of his inner circle, including Caroline Ellison, who was Bankman-Fried's girlfriend at the time and CEO of Alameda Research.

Rehn told the jury they will hear directly from that quartet of cooperating witnesses, including Ellison.

Cohen encouraged jurors to be skeptical of their testimony, noting they had pleaded guilty and are likely to receive a lighter sentence as a result of their cooperation.

In an attempt to preempt that argument, Rehn urged jurors to "scrutinize their testimony carefully." But, he told them, they will offer first-hand insights into the multibillion-dollar fraud the government alleges Bankman-Fried perpetrated with their help.