The prosecution unveils profane messages in FTX founder's fraud trial

The prosecution in the fraud trial of FTX founder Sam Bankman-Fried revealed a series of profane messages on Wednesday, unravelling the public image he cultivated as a supporter of cryptocurrency oversight. These messages, presented in the Manhattan federal court, have changed the narrative Bankman-Fried has built around his advocacy for regulatory measures within the cryptocurrency industry.

U.S. District Judge Lewis Kaplan overruled objections from Bankman-Fried’s defence team, permitting the jurors to see a message he sent to a Vox reporter↗︎ days after FTX’s collapse in November 2022. In this message, Bankman-Fried vented his frustrations, blaming regulators for “making everything worse.” Another profanity-laced message surfaced, directed at a journalist from crypto news site The Block on Twitter (now X), referencing U.S. Securities and Exchange Commission Chair Gary Gensler.

The contents of these messages have raised questions about Bankman-Fried’s authenticity in advocating for cryptocurrency regulation. In the revealed messages, he criticized U.S. lawmakers, labelling them as “dumb” and insinuating their willingness to hand over the cryptocurrency industry to Gensler on a silver platter. Gensler’s reputation in cryptocurrency circles is one of a stern regulator, making Bankman-Fried’s remarks particularly contentious.

The trial, which started on October 3, accuses Bankman-Fried of embezzling billions from FTX customer funds. Prosecutors allege that these funds were used for personal investments, political donations, and to support his hedge fund, Alameda Research. The prosecution contends that Bankman-Fried’s political contributions were strategically made to advance legislation favourable to the cryptocurrency sector.

Bankman-Fried, now 31, has pleaded not guilty to two counts of fraud and five counts of conspiracy. If convicted, he could face substantial prison time. His defence team attempted to prevent the introduction of the messages as evidence, asserting that they were informal comments made outside the trial’s relevant timeframe. However, prosecutor Danielle Sassoon successfully argued that these messages were crucial in understanding Bankman-Fried’s mindset at the time, despite his later claims that the conversation was off the record.