“FTX creditors,” appealed to Sunil Kavuri on Twitter days after the ongoing trial of Sam Bankman-Fried started, adding: “never forget all the CT influencers that fawned over SBF, posted their FTX ref links, posted their fake screenshot P&Ls on FTX and never talked about FTX bankruptcy/creditors again.”
Kavuri lost about $2.1 million to FTX and has now become one of the vocal champions of FTX creditors. He describes himself as an FTX creditor activist for his newfound role and is now making rounds of media outlets to share his thoughts on the trial.
"Sam Bankman-Fried has literally destroyed so many people's lives," said Kavuri, who is now receiving dozens of queries every day from fellow FTX creditors, the BBC stated. "One person in Turkey was left with only $600 (£490) in their bank account after losing everything, and one in Korea was hospitalized with panic attacks."
The Trial of the Century: Billionaire's Embezzlement Case
The criminal trial of SBF started last week. The infamous figure, who founded and headed the crypto exchange FTX, attended the court with a new haircut and in a suit and tie, unusual from his signature shorts and t-shirt look.
The trial is receiving significant media attention, from the crypto-specific media and also mainstream finance. As the 12-member jury heard the opening arguments on Wednesday, the investors are keen on knowing the decision, as they are waiting for the settlement with the bankruptcy administration, which is unrelated to the trial.
The defense lawyers argued that SBF is a math nerd who overlooked risk management but did not steal from customers. However, prosecutors said the entire FTX empire was "built on lies."
SBF's Defense: The Intricate Courtroom Strategy
Some vocal legal minds on social media are also heavily critizing SBF and the arguments of the defense. John Reed Stark, the President of John Reed Stark Consulting LLC who was also a former SEC employee, wrote: "SBF’s 'Alameda was a market-maker' defense is absurd. Calling Alameda a 'market-maker' is like calling a crooked airport baggage handler an airline pilot. Alameda was SBF’s personal, custom-designed money laundering conduit. Period. End of story."
Stark also questioned the effectiveness of the defense strategy in light of some of the previous confessions of SBF about his fake image in public.
Analyzing the defense's strategy, Sam Enzer, a partner at Cahill Gordon & Reindel, said in a podcast: "The defense is trying to humanize Sam Bankman-Fried... [Obvious questions to the witnesses] corroborates that little fact and it takes some of the sting out of the bad testimony."
Courageous Testimonies: FTX Victims Take the Stand
The first witness who took the stand was Marc-Antoine Julliard, a cocoa bean trader, who lost $100,000 as a customer of FTX. He was under the impression that FTX had strong financials, especially because of the celebrities and venture funds that were attached to the brand, and he felt "extremely anxious" when he could not withdraw his funds from the platform. He further said that he did not know the platform had borrowed his money.
FTX had an estimated customer base of more than 1 million. While most of the customers, or now victims, remain silent spectators of the trial, a few vocal ones took to social media to express their distaste for SBF.
"It affected my life," Lee Rees, a London-based crypto trader who lost $100,000 to the collapsed exchange, told Reuters. "I had a life to pay for. It's like your boss doesn't pay you. You can't live, can you?"
While FTX's bankruptcy administration looks after customers' claims, Rees, who filed a claim, mentioned that "all these terms were so complicated," adding: "You need a lawyer to understand it... We don't know if we're getting our money back or not."
Maxime, who is from Belgium had a "six-figure sum" at FTX, said: "I think there is a risk that there will be many victims who will find themselves victims again because of this procedure."
Accountability on Trial: The Quest to Uncover the Culprits
At its prime, FTX was one of the top global cryptocurrency exchanges. It ran extensive campaigns and bought celebrity endorsements. SBF was additionally active in the US political circle. He was one of the top donors to President Joe Biden's election campaign. Now, many are raising the issue of the US government turning a blind eye toward FTX's lapses.
American author Michael Lewis, who strategically launched his book on SBF ahead of the trial, revealed that the FTX's Founder was even considering offering Donald Trump $5 billion to stop him from running in the US presidential election.
The book, "Going Infinite: The Rise and Fall of a New Tycoon," revealed that SBF met with the Prime Minister of the Bahamas to discuss paying off the country's entire national debt of roughly $10 billion. SBF ran the operations of FTX.com from the headquarters in the Bahamas with his so-called "inner circle."
Meanwhile, other prominent Twitter accounts are also digging up previous interviews of SBF when he made controversial statements about his business.
The Domino Effect: How SBF's Trial May Trigger Future Lawsuits
It has been only one week, and the splinters from the SBF trial are already indicating upcoming lawsuits against other institutional lenders to FTX.
Garry Wang, the Co-Founder and former Chief Technology Officer of FTX who also testified last week, told the jury that FTX "gave special privileges to Alameda Research to allow it to withdraw unlimited funds from FTX and lied about it." He revealed that FTC repaid lenders, including Genesis, with customers' funds.
Furthermore, Matt Huang, the Co-Founder of Paradigm, testified against SBF, informing the jury that his company wrote off the entire $278 million investment into FTX. Earlier, several other major venture capitalists confirmed that they also wrote off their investments in FTX.
