Dog coin-loving crypto bros caused chaos for New York City’s dog mayoral election earlier this month when they interfered in the race to pump a meme coin named after one of the leading candidates.

According to its website, New York’s NYC Dog Mayor competition was “founded to create something fun and joyful for people at a time in which many are struggling; to provide a unique opportunity for NYC community development; and to present politics and civics in a positive, educational, and compelling way (for once.).”

So-called “doggy influencer” Bertram the Pomeranian, who has nearly 400,000 followers on Instagram, was already among the frontrunners to snatch victory.

However, his bid for the title was further boosted when holders of the namesake meme coin BERT began to employ underhand tactics to drum up voters and even discredit Bertram’s opponents.

This was done, according to one rival dog owner, “to pump their valueless shitcoin.”

Olivia Caputo , the owner of one of Bertram’s biggest rivals, Enzo the Shih Tzu, posted a lengthy statement via Instagram announcing her — and her dog’s — withdrawal from the mayoral race and explaining how it had “turned into a catalyst for spreading hate, negativity, and threats of violence towards Enzo.”

Read more: Trump sells DOGE shirts after Musk appointment, Dogecoin rally

Caputo alleges in her statement that BERT coin supporters were “offering payment/giveaways to sway people to vote for Bert,” and said that “the way they are speaking in their group chats indicates it’s clearly a pump and dump scheme, which people will ultimately suffer harm from.”

Caputo told The New York Times that she first became suspicious when, in a previous voting round, the number of votes being cast for Bertram saw a jump of more than 3,000 over the previous round.

She claimed that the increase happened at the same time as Bertram started to see increased support on social media and even financial incentives in return for votes.

She also claims to have seen Telegram chats in which Bertram’s supporters stated they would use the platform to “pump the price.”

The coin, which has been trading since mid-October, did experience a spike this week, jumping from $0.0017 on Tuesday to $0.054 on Thursday. This is despite Bertram dropping out of the race at the final stage, with his owner Kathy Grayson saying, “The whole thing has been in a way, darkly hilarious.”

“It has absorbed the anxiety facing people in human elections. People are getting worked up projecting all the human stuff,” she added.

The contest’s creator Stephen Calabria said, “Frankly, I had always envisioned this as a good faith and good-humored way to get shelter dogs adopted and to use this as a platform for good.”

He added, “If I never hear the word crypto again, it will be a blessing.”

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The New York Stock Exchange is reportedly polling traders to see if they want to open trading up 24 hours a day, seven days a week, similar to cryptocurrency and forex markets.

Leading the charge on the proposed change is infamous hedge fund manager Steve Cohen, who is attempting to open up his own exchange called 24 Exchange, which currently has tradeable markets out of Bermuda.

Last year, 24 Exchange discontinued trading in crypto products and gave up on a bid to open up trading of US equities but it’s restarting the process now.

The current move wouldn’t be the first time that the NYSE has considered plans to become a 24/7 trading venue. Indeed, in 1990 John Phelan Jr., chairman of the NYSE, proposed a plan to ensure markets were never closed.

At the time, the reasoning was that the NYSE was losing market share to foreign markets like the London Stock Exchange. The proposal would’ve brought 24-hour trading to the NYSE trading floor by 2000, but nothing ever materialized.

Read more: A year on from the US regional banking crisis, what’s changed?

A new paradigm: Hustle more

There are, of course, benefits to having markets open 24 hours a day. Currently, if news breaks about a company late on a Friday evening — positive or negative — market participants need to wait until early Monday morning to trade based on the news. With a 24/7 market, price discovery would occur sooner — though it’s unclear if weekend movements would be less liquid and therefore more volatile.

Currently, many brokers offer pre-market and after-market trading to customers. This means that shares are tradeable in the hours before the New York Stock Exchange officially rings the opening and closing bells, but these markets are almost always meaningfully less liquid than during ‘open’ trading hours.

What a 24/7 market is sure to accomplish is less time off for executives and traders who will need to always be abreast of market direction, breaking news, and regulatory filings, and more profit for market makers and high-frequency traders, as their roles grow outsized in thinner weekend markets.

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A new report by the New York State Comptroller has found significant inadequacies in the New York Department of Financial Services’ (NYDFS) BitLicense operations, suggesting the regulator hasn’t conducted due diligence when it comes to crypto firms.

To conduct cryptocurrency business in New York, companies need to apply for either a BitLicense or a charter under local banking law. However, a lengthy investigation has found only “limited assurance” that the NYDFS is properly performing its duties in supervising and granting these BitLicense applications.

The office of New York State Comptroller Thomas DiNapoli said on Monday that NYDFS could provide no evidence that it was actually reviewing applicants’ tax obligations. Significant lags were found in the time between information submissions and approvals; in one reviewed instance, it took the NYDFS four years to grant an application after a company submitted documents. This wide gap has created possibilities that the NYDFS is granting BitLicenses based on outdated information, the report stated.

NYDFS has also failed to enforce proper fingerprinting processes and has not ensured that crypto firms disclose financial reports — an essential step used to determine whether an applicant conducts sound business.

Read more: New York crypto firms will soon pay for their own regulation, just like banks

DiNapoli included several key recommendations for the regulator to improve its BitLicense management. These include developing and implementing better procedures, policies, and safety standards, as well as thoroughly documenting actions taken for an application.

The comptroller’s report looked as far back as 2018 and sampled eight licensees out of 32, which includes Coinbase, Gemini, Paxos, Circle, and PayPal. In response to the reports, the NYDFS has said it has already taken steps to fine-tune its processes.

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The New York Attorney General (NYAG) has filed a lawsuit against Digital Currency Group (DCG) and its CEO Barry Silbert, Genesis and its ex-CEO Michael Moro, and Gemini. The lawsuit alleges that these three companies defrauded 230,000 investors, including about 29,000 New York residents, out of more than $1 billion.

According to the complaint, Silbert and the other defendants lied and schemed to defraud Gemini Earn stakeholders, especially regarding the financial condition of its primary partner, Genesis.

The NYAG alleges that Gemini misled investors about Gemini Earn, an investment program operated in collaboration with DCG subsidiary Genesis Global Capital. Gemini promoted Gemini Earn as a low-risk investment yielding ultra-high interest rates.

Unfortunately, despite these claims, Gemini Earn failed, losing over $1 billion of its customers’ money. Genesis is also bankrupt. 

At one point, Sam Bankman-Fried’s Alameda was the borrower for nearly 60% of all outstanding loans from Genesis. Even more breathtaking, Alameda collateralized most of those loans with FTT tokens.

The NYAG alleges that DCG, Silbert, Genesis, Moro, and Gemini all lied about the risks of this failed program. They also withheld material information about Gemini Earn’s massive risks. According to the suit, all of the defendants illegally concealed massive losses from investors and Gemini Earn customers.

A rough timeline of lies and illegal activities

February 2, 2021: Gemini announces the launch of Gemini Earn.

June 17, 2022: Then-CEO of Genesis Trading Michael Moro says Genesis Global Capital is working on mitigating losses due to a “large counterparty” that failed to meet a margin call. He falsely claims that no client funds are impacted.

June 29, 2022: Genesis Global Capital confirms “hundreds of millions” in exposure to the now-bankrupt Three Arrows Capital. The co-founder of Three Arrows Capital is currently in jail.

July 6, 2022: Michael Moro confirms a significant loan to “a large counterparty who failed to meet a margin call.” He said Genesis liquidated the posted collateral to hedge its downside. He also confirmed that Genesis’ parent company, DCG, would assume most of the liability to protect Genesis’ finances. That counterparty, Three Arrows Capital, subsequently filed for bankruptcy protection during the fallout from Do Kwon’s Terra/LUNA meltdown.

November 10, 2022: Genesis Global Capital reveals that its derivatives wing has $175 million of funds locked within FTX.

November 11, 2022: DCG sends a $140 million equity infusion to Genesis.

November 16, 2022: Genesis Global Capital freezes redemptions, impacting Gemini Earn customers’ ability to withdraw their funds.

November 16, 2022: Genesis Global Capital reveals to Gemini that it sold 30.9 million GBTC shares at $9.20 per share. The net proceeds were applied to the amount it owed to Gemini Earn.

November 17, 2022: Circle confirms “minimal” exposure to Genesis through its Circle Yield product — $2.6 million in outstanding loans that Circle says are well-collateralized.

November 22, 2022: Barry Silbert sends a letter to DCG shareholders sharing the details of a $1.1 billion promissory note issued to Genesis after the Three Arrows Capital meltdown.

Read more: Genesis pressure mounts as Cameron Winklevoss threatens Barry Silbert

January 8, 2023: Gemini formally ends its Gemini Earn program.

January 10, 2023: Gemini co-founder Cameron Winklevoss tweets an open letter accusing DCG and Genesis Global Capital of making misleading statements to Gemini and Gemini Earn investors. He calls for the ousting of CEO Barry Silbert.

January 10, 2023: Gemini and its co-founders file a response to a lawsuit filed by Brenda Picha and Max Hastings, two Gemini Earn users who lost funds due to the meltdown in the relationship between Gemini Earn and Genesis Global Capital. In the response, Gemini alleges, “Due to events beyond defendants’ control, Genesis has wrongfully refused to return Plaintiffs’ assets.”

January 12, 2023: The SEC announces charges against Genesis Global Capital and Gemini Trust Company for “the unregistered offer and sale of securities to retail investors” through Gemini Earn.

January 19, 2023: Genesis’ lending arm files for Chapter 11 bankruptcy in the Southern District of New York.

February 6, 2023: DCG announces a tentative settlement between Genesis and its creditors.

April 25, 2023: DCG publishes a statement on Gemini’s motion for mediation, claiming that “a group of Genesis Capital’s creditors have reneged” on an earlier settlement. Genesis creditors reject a proposed bankruptcy settlement.

May 9, 2023: DCG publishes a statement on ongoing mediation in which it says it is committed to pursuing a “fair” outcome for all parties involved.

July 7, 2023: Gemini sues DCG for fraudulently covering up its Three Arrows Capital-induced insolvency

August 10, 2023: DCG files to dismiss Gemini’s lawsuit.

August 29, 2023: DCG publishes a statement on a tentative deal between Genesis and the Unsecured Creditors Committee.

September 13, 2023: DCG publishes an open letter that estimates a 70-90% return for all unsecured creditors and a 95-110% return for Gemini Earn users.

September 28, 2023: Sources say the Winklevoss twins withdrew $280 million from Genesis before it collapsed.

October 19, 2023: The NYAG sues DCG, Barry Silbert, Genesis, Michael Moro, and Gemini, alleging various frauds that cost investors over $1 billion.

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Sam Bankman-Fried’s defense team filed a motion on Sunday evening that states that he has “not [had] his prescribed dose of Adderall during trial hours,” with the footnote that he “has been given one dose between 4:00 am and 6:00 am… which wears off by the time trial starts at 9:30 am.”

The footnote also clarifies that Bankman-Fried receives a second dose of Adderall “between approximately 8:00 pm and 9:00 pm.”

The motion alleges that Bankman-Fried “will not be able to meaningfully participate in the presentation of the defense case” without having access to “a 12-hour extended-release 20mg dose of Adderall in the morning before he is transported to the courthouse.”

The motion cleverly includes the caveat that “even if [SBF is given extended-release Adderall] there is no way of knowing… whether [it] will be effective.”

Read more: Sam Bankman-Fried’s defense team failed to crack Caroline Ellison

Real problem or possible solution?

While Bankman-Fried has previously complained of an inability to receive medication while in jail, this latest problem looks at least to open up a convenient solution for the on-trial former billionaire; namely, the potential to claim a mistrial at some point in the future.

It could very well be that Bankman-Fried is finding it difficult to focus before much of the trial has taken place daily and it’s absolutely worth ensuring that the alleged fraudster has his medical needs met.

However, the caveat of not knowing if altering the medication will be effective paves the way for a future motion or appeal that could suggest Bankman-Fried was improperly medicated and therefore misrepresented himself on the stand or otherwise was unable to prepare a proper defense.

What’s clear, regardless of whether the motion for an alteration in medication goes forward or not, is that the defense will be throwing as many wrenches into the prosecution’s plans as possible – usually in ways that journalists, the public, and – hopefully for the defense team – the prosecution haven’t yet considered.

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At a glance

• Under a plea deal, FTX co-founder Gary Wang told the jury he was a participant in financial crimes at the direction of Bankman-Fried, and detailed some of those crimes.
• Witness testimony established for the jury that Bankman-Fried knew of FTX’s financial woes while lying about them to the public and investors. 
• Judge Lewis Kaplan excoriated Mark Cohen’s team for time-wasting and repetitive questioning, which seemed to accomplish little. The defense’s main goal seems to be to discredit the prosecution’s witnesses, but it’s doing that poorly.
• During the defense’s cross-examination, Barbara Fried appeared distressed, grinding her balled fists into her eyes. The rough state of the defense may be obvious to even Bankman-Fried’s closest allies.

Gary Wang, co-founder of FTX and Alameda Research, took the stand against his former business partner Sam Bankman-Fried on Thursday, October 5 — the first full day of witness testimony in the criminal trial of the fallen crypto wonder boy. 

In perhaps his most damning testimony, Wang said that he agreed to receive huge personal loans from the company under pressure. He also said he never actually saw the money, driving home a broader pattern of financial chicanery at the two companies.

“Did it ever go in your bank account?” prosecutors asked Wang of the loaned money, in the final exchange of the day.

“No,” answered Bankman-Fried’s formerly enigmatic co-founder.

Gary Wang’s testimony capped off a packed day. Former FTX developer Adam Yedidia’s testimony concluded, with Yedidia recounting a June 2022 conversation in which Bankman-Fried showed clear knowledge of FTX’s financial problems. Coupled with a number of tweets from Bankman-Fried that sought to reassure the public that everything was fine at FTX, this appeared to establish the facts for the charge of wire fraud against him.

Bankman-Fried himself has been gnomic during the trial, seemingly preoccupied with documents on his laptop. But as Wang’s testimony began, Bankman-Fried appeared for the first time to be paying close attention to a witness.

Wang was subdued and gave short, focused answers. He detailed his role in creating “special privileges” for Alameda Research on the FTX platform, which allowed the firm to “withdraw unlimited funds” from the exchange, and to place orders faster than other market-makers. That meant Alameda could easily “front-run” not just competitors, but FTX customers, effectively using a cheat code to steal from them on a moment-by-moment basis. 

Alameda’s line of credit on FTX, Wang said, was $65 billion dollars. That’s several orders of magnitude higher than the “single to double-digit millions” that Wang described as normal for market makers on FTX. It’s also several times higher than the $8 billion in customer deposits that went missing.

Wang also described Bankman-Fried directing him to implement these features.

Bankman-Fried: “We’re Not Bulletproof”

Earlier in the day, former FTX engineer Adam Yedidia finished his testimony by detailing the timeline of concerns about FTX’s financial condition. Yedidia wore an ill-fitting suit with a loose tie and crooked collar, the very image of a socially awkward computer developer.

Yedidia recounted being assigned to automate the process for customers depositing funds, and in the process became aware that Alameda Research had borrowed $8 billion dollars of FTX customer funds. Yedidia described expressing those concerns to Bankman-Fried after a June 2022 paddle tennis game at the Albany resort where FTX and Alameda were based.

Bankman-Fried replied that while FTX had been “bulletproof” in 2021, “we’re not bulletproof this year [2022].” Yedidia recounted Sam’s estimate that FTX would be “bulletproof” again in “six months to three years.”

The clear takeaway was that Bankman-Fried was aware of serious financial problems at FTX as early as June of 2022. Earlier evidence had included tweets in which Bankman-Fried was still reassuring customers that FTX was “fine” as late as November of 2022. These two sets of facts seem to clearly establish evidence of fraud.

The defense’s attempts to undermine Yedidia’s testimony were, in a word, feeble.

“Would you say no crypto company was bulletproof at this time?,” the defense counsel asked Yedidia. This seemingly reflects a larger defense strategy to confuse the details of FTX’s operation with “crypto” writ large.

But prosecutors objected to the nature of the question, which was stricken from proceedings. The defense faced dozens of these objections as it asked witnesses to comment on matters beyond the scope of their testimony. Judge Kaplan sided with the prosecution again and again, leaving the defense visibly flummoxed.

Eventually, Kaplan also called a sidebar and seemed to sharply reprimand the defense for the repetitive nature of some of its questioning. In each of its cross-examinations so far, the defense has spent the majority of its time simply asking witnesses to repeat facts already established in questioning by the prosecution.

The defense also seemed to attempt to discredit Yedidia’s testimony by asking multiple questions about the immunity agreement under which he was testifying. But Yedidia, unlike Gary Wang, resigned from FTX after he became aware of Alameda spending customer deposits, and has not been charged with a crime, leaving the line of attack unconvincing.

Bankman-Fried’s parents show the strain

The cross-examination of Yedidia by the defense also saw one of the first moments of courtroom melodrama. On multiple occasions during the testimony, Barbara Fried could be seen removing her glasses, bowing her head, and grinding her fists into her eyes for minutes on end — possibly to conceal or suppress tears. Joseph Bankman, Sam’s father, also slumped in seeming frustration.

But the true depth of the defense’s missteps wasn’t clear until prosecutors returned for “redirect,” a third round of questioning for Yedidia. The defense had asked Yedidia about Bankman-Fried’s personal spending habits, seeming to imply that not buying nice clothes or a flashy car indicated he was an honest actor.

But prosecutors asked Yedidia one simple follow-up question about spending: “Have you heard of FTX Arena?” 

The question triggered waves of laughter in the courtroom, and Yedidia detailed the profligate $100 million spent to acquire naming rights to the former Miami Heat arena.

Yedidia’s testimony concluded with a personal question. From living in a $35 million penthouse in the Bahamas, Yedidia since leaving FTX has been working as a high school math teacher. While it’s a moral upgrade, that highlights just how dramatically involvement in FTX impacted even those players not charged with complicity in Bankman-Fried’s alleged crimes.

Read more: Why Michael Lewis got Sam Bankman-Fried so wrong

Investor fraud

Between Yedidia and Wang, we also heard testimony from Matt Huang, co-founder of the crypto-focused venture capital fund Paradigm. Like the rest of the prosecution’s witnesses, Huang was subdued and seemed credible, taking a measured tone and giving specific and concise answers.

Huang established that facts seemingly concealed from Paradigm would have impacted their decision to invest nearly $300 million in the platform. Specifically, Huang testified that Paradigm would have been less likely to invest had it known that Alameda Research had a special exemption from FTX’s “liquidation engine,” and that Alameda was using customer funds as investment capital.

“Our general understanding was that the exchange would take customer deposits and hold on to them,” Huang testified. Of the crypto industry more generally, he later said, “It’s generally understood that customer deposits are sacred.”

Huang’s testimony was the first to speak to charges of securities fraud against Bankman-Fried, based on the misrepresentation of FTX’s business to capital investors.

Asked about the current value of Paradigm’s $278 million investment in FTX, Huang was blunt:

“We marked it to zero.”

Friday’s agenda

Friday’s court session will conclude early, at 2pm Eastern, to accommodate a juror’s travel plans. That may be largely taken up with concluding Wang’s testimony. 

Prosecutors indicated that their next witness is Zac Prince, CEO of now-bankrupt crypto lender BlockFi.

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Day one of Sam Bankman-Fried’s criminal trial on charges of wire fraud, money laundering, and conspiracy was officially scheduled to begin at 9:30am. For unclear reasons, Bankman-Fried arrived, dressed in a court-allowed grey business suit, at 9:55am.

The first two orders of business in the courtroom may also have been the most significant news of the day. In statements before Judge Lewis Kaplan, both government prosecutors and Bankman-Fried’s defense team affirmed that he had received no offer of a plea deal from the government.

The lack of any plea offer whatsoever explains the biggest mystery of the trial: why there’s a trial at all.

Various statements by Bankman-Fried and his parents have made the trio seem borderline delusional in their insistence that Sam is innocent, despite his own executives already having confessed to numerous crimes. But if confessing your guilt gets you little or nothing, why not pretend you’re innocent for as long as you can?

The second opening note struck at the heart of this case: Kaplan reminded Bankman-Fried, at some length, that it was entirely his own decision as to whether he would testify in his own defense.

In the weeks between FTX’s collapse and his arrest last year, Bankman-Fried performed a barnstorming media tour to try and spin a farfetched tale of his innocence in the matter of the disappearing $8 billion dollars. However, those appearances arguably did him more harm than good as he appeared to try to weasel out of any responsibility for the disaster.

But it’s unclear that Bankman-Fried is actually capable of shutting up, even when it’s clearly in his best interest to do so. Even if that’s the advice his lawyers and advisers are clearly and directly giving him. He seems to think he’s smarter than everyone but he’s badly wrong about that and it’s enthralling to watch.

The entirety of his trial will now be overshadowed by two questions: Will Bankman-Fried invoke his constitutional right to take the stand? 

And if he does, just how badly will he fuck it up?

Read more: A deep dive into FTX’s lawsuit against Sam Bankman-Fried’s parents

A new Sam Bankman-Fried?

Any number of procedural or legal hurdles might have caused Bankman-Fried to arrive late. He’s being held in jail for the duration of his trial, after all. It’s more likely that some misspelling on a form or some other mistake by the jail was to blame than the former billionaire’s notoriously uncontrolled sleep schedule.

In fact, that old Bankman-Fried was hard to find in the courtroom. Back when he ran the cryptocurrency exchange FTX (and allegedly influenced decisions at its supposedly separate sister company, crypto prop shop Alameda Research), he cut a notoriously disheveled, even slovenly figure, particularly toward the end of it all.

But in court on Tuesday he managed to look surprisingly presentable. He wore his court-allowed grey suit, has cut his notoriously ungroomed hair short, and has clearly lost quite a bit of weight over the 10 months since his arrest — much of it, one guesses, in the past six weeks as a guest of the Metropolitan Correctional Center in Manhattan.

The transformation wasn’t just on the surface, either. Bankman-Fried over the course of the first day displayed almost no trace of his now-trademark habitual leg-bouncing. He sat quietly, focused on what appeared to be documents on his air-gapped laptop, barely glancing around and speaking out only to answer questions from the bench.

But still, showing up 30 minutes late to the first day of a trial in which you stand to be sentenced to a cumulative 120 years in prison?

Classic SBF.

The lateness certainly didn’t endear the defendant any further to the gaggle of journalists who began queueing for courtroom seats as early as 6am in anticipation of a huge crowd of gawkers at what promises to be the financial fraud trial of the decade.

That turned out to be wasted heroics, however — and only partly because of SBF’s tardiness. For one, there was no crowd — if there is such a thing as a trial groupie, they didn’t show, likely pulled away by Donald Trump’s proceedings right next door. Moreover, the order of the day was jury selection, which meant we had to sit in the overflow room and watch something incredibly boring on closed-circuit TV for the next six hours.

The procedure of jury selection primarily amounts to asking a huge number of people a huge number of questions so you can eliminate the ones who have either some conflicting personal connection to the case or an insurmountable bias that would make it impossible for them to judge guilt fairly. In this case, that meant a good number of questions about jurors’ involvement in investing or the financial or technology industries.

Read more: Opinion: No, Sam Bankman-Fried isn’t going to walk free

A jury of his financial peers (or, hopefully, better than that)

The bad news is that jury selection wasn’t completed, and will continue today.

But in the process so far, we learned that a huge proportion of the prospective jurors have personal connections to the finance industry. No surprise, since jurors for the SDNY are drawn from Manhattan, the Bronx, and outlying counties. Prospective jurors detailed roles at or connections to financial investigations firms, a major global financial regulator, and an investment advisory firm, just for a start.

Incredibly, one prospective juror was employed by a venture capital fund that had invested in SBF projects and lost money. That prospect was predictably removed from the pool, but what seemed to be a dozen or so other jurors being considered had financial roles or partners in the industry. 

It was hard to keep track of which of these prospects remained in the pool by the end of the day (and getting too detailed could compromise jurors’ anonymity anyway). But this is not just a jury pool that contains a lot of finance industry types, it also includes a lot of people in orbits around finance who know it better than average.

So is it good or bad for Sam Bankman-Fried if he happens to stand before a jury of his actual peers — that is, people who (kind of) understand finance?

I believe it’s yet another catastrophe for a defense that has nothing going for it. 

Finance professionals and the generally more savvy New York jury are far less likely, at the very least, to be bowled over by buzzword-heavy attempts to paint SBF as some sort of visionary or genius. They may not all instantly understand the mechanics of his fraud, but they are also less likely to be distracted or overwhelmed by the role of cryptocurrency in it.

One prospective juror, in discussing his possible predisposition on the case, glancingly compared Bankman-Fried to notorious 2000s fraudster Bernie Madoff. The judge instantly called a sidebar, perhaps to prevent the prospect from tainting other jurors in the room with his opinion. You can bet these New Yorkers all know who Madoff was.

A smaller number of prospective jurors had invested in cryptocurrency, and of those, all said they had lost money. One said a close relative had lost a life-changing amount of money investing in cryptocurrency. This also, obviously, bodes extremely poorly for Bankman-Fried.

The trial continues today, October 4, with jury selection expected to conclude in the morning, and the prosecution’s opening statement by afternoon.

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From charges to testimony to strategy, here’s everything you need to know to follow the biggest fraud trial of the decade.

This morning, Tuesday October 2, in downtown Manhattan, Sam Bankman-Fried’s criminal trial for a litany of alleged financial crimes will begin. 

Bankman-Fried stands accused of effectively stealing roughly $8 billion dollars worth of cryptocurrency and other funds belonging to large and small speculators worldwide. His methods were a mix of complex related-party accounting, uncanny media magnetism, and simply giving money to his friends. If convicted, Bankman-Fried would be by many measures the biggest financial fraudster since Bernie Madoff.

Here’s how Sam Bankman-Fried’s alleged crimes, as well as some pretty wild stuff adjacent to the crimes, will be presented to a jury.

Read more: SBF leaked diaries to harass Caroline Ellison and derail trial, lawsuit claims

The courtroom

The trial is scheduled to last six weeks, with court in session on average four days a week. The most notable thing about the SDNY courthouse proceedings of the Bankman-Fried trial is that no cameras will be allowed in the courtroom. For the nuance of events, you’ll be relying on a mix of sketch artists and in-person reporters. Like me.

Bankman-Fried will be coming to court from jail, where he was remanded last month by Judge Lewis Kaplan. He had been enjoying the pool at his parents’ home near Stanford University, until he leaked portions of former Alameda Research CEO Caroline Ellison’s diary to New York Times reporters. An article based on that leak was published on July 20, and on August 11 Judge Kaplan ruled that it amounted to attempted witness tampering and ordered Bankman-Fried back to jail.

One interesting question that will be answered early in the trial is how Bankman-Fried has been coping with conditions at the Metropolitan Detention Center where he is being held. Bankman-Fried may not have much heart for lockup. After his initial arrest in the Bahamas last December, he initially seemed poised to fight extradition to the US. But he reversed course after a matter of days, seemingly to escape conditions in Bahamian jail.

Bankman-Fried will be allowed to wear a suit to the trial, rather than his prison jumpsuit. This is generally helpful in creating a positive impression on a jury, though Bankman-Fried has rarely appeared comfortable in a suit, and it might simply highlight his strange adult-child demeanor.

He’s also been given permission to use a laptop to take notes during the trial, but it will be ‘air-gapped,’ with no access to the internet. It may have been the only way to prevent the former wunderkind from playing League of Legends during his own trial.

The judge

Judge Lewis Kaplan is a 78-year-old Harvard Law School graduate, appointed to the bench by President Bill Clinton. 

Kaplan has seemed stern in an array of rulings and statements so far. When revoking Bankman-Fried’s bail in August. In his ruling, Kaplan said that Bankman-Fried’s behavior included apparent attempts to get FTX’s lead lawyer “to get together with Bankman-Fried” to make sure their stories “are on the same page.” This said Kaplan, “suggests to me that maybe he has committed or attempted to commit a federal felony while on release.”

More recently, in a September 28 proceeding, Kaplan denied Bankman-Fried’s request to be released from jail during the trial. Kaplan stated that he considered Bankman-Fried a flight risk, given that he could face a “very long sentence” if convicted.

Those statements don’t indicate that Kaplan is biased against Bankman-Fried, but it’s safe to say he isn’t biased in his favor either. This is significant given the efforts by Bankman-Fried and allies to paint him as an innocent bumbler rather than a calculating criminal. Kaplan doesn’t appear to have been as seduced by Bankman-Fried’s mythos as many others were.

Read more: Opinion: We need to talk about that New Yorker Sam Bankman-Fried article

The jury

The first day at least will be taken up with jury selection, so big moments like opening statements won’t come until Wednesday at the earliest.

Jury selection could be difficult and even contentious, however. The defense has to deal with a huge amount of almost uniformly negative coverage of Bankman-Fried in the media, and may have to sift through a lot of jurors to find 12 who haven’t already made up their minds about him to some extent. The depth of that challenge was on display in the defense’s proposed jury questions, some of which seemed designed to screen out, for instance, jurors who were familiar with the effective altruism movement.

Then, just three days ago, the defense challenged the Justice Departments’ own proposed jury criteria, claiming included language that would prejudice potential jurors by implying Bankman-Fried’s guilt.

The witnesses

By far the most scintillating part of the trial is expected to be testimony from Bankman-Fried’s former colleagues, friends, and in one case, lover. 

Caroline Ellison, former Alameda CEO and Bankman-Fried’s on-off girlfriend, was among former associates who accepted plea deals, agreeing to testify against their former boss in exchange for shorter sentences. Ellison is expected to testify that she engaged in fraud, including concealing personal loans to executives, on Bankman-Fried’s orders.

Also expected to take the stand is Nishad Singh, former FTX director of engineering, who played a role in Bankman-Fried’s alleged scheme of political ‘straw donors.’ Singh may also testify to being aware that FTX was misusing customer funds.

Gary Wang, a co-founder of both Alameda Research and FTX, is described by CoinDesk as both “mysterious,” and a close confidant of Bankman-Fried. The two met in high school math camp and were roommates at MIT. Wang is a former Google staffer and also helped oversee FTX’s charitable efforts, guided by the ethos of effective altruism.

Other major FTX figures won’t testify, including two who have already pled guilty: former FTX digital markets CEO Ryan Salame and Dan Friedberg, who held various top legal roles.

Nor will the final major FTX figure who hasn’t been charged, Sam Trabucco. Trabucco was co-CEO of Alameda Research for a time with Caroline Ellison but left the firm before its collapse and the revelations of fraud. He set sail on a yacht paid for by FTX, and his current location seems to be unknown.

Bankman-Fried’s defense team is not nearly so blessed with witnesses. In a particularly striking example of Kaplan’s seeming skepticism toward the Bankman-Fried team, the judge rejected all of Bankman-Fried’s proposed defense witnesses in a September 21 ruling. Kaplan agreed with Department of Justice arguments that the proposed testimony from those witnesses was vague, legally inappropriate, or off-topic.

That they were so hard up for favorable and legitimate witnesses doesn’t seem to bode well for the defense, either on substance or strategy. Bankman-Fried’s team, however, will have the opportunity to request two of its proposed witnesses to give testimony rebutting government witnesses.

Read more: Crypto Twitter thinks it knows what SBF was doing at DoJ offices

The defense

In addition to its trouble with witnesses, there are signs that the defense’s broader argument for letting Bankman-Fried go rests on shaky ground. 

In pretrial filings, the defense has indicated most clearly that it plans to pursue, at least in part, an ‘advice of counsel’ defense. This would essentially argue that FTX’s lawyers, the firm Fenwick & West, told Bankman-Fried that it was perfectly fine to do things like loan himself $2 billion of customer money.

That seems like fairly thin gruel, and its limitations are deeper than being unconvincing. Judge Kaplan has ruled that Bankman-Fried’s defense team can’t blame the lawyers in their opening statement. Kaplan ruled that the claim, presented without detail, could confuse a jury.

Recent revelations do present a more compelling possible line of defense. Communication records presented in a recent filing by the FTX estate include strong evidence that Bankman-Fried’s own parents not only guided his actions but seemed occasionally to encourage his excesses. This included both Barbara Fried seeming to advise the use of straw donors, and Joseph Bankman pressuring his own son for an exorbitant $1 million annual salary. 

It seems that instead of that raise, Bankman-Fried’s parents received a carefully structured $10 million gift, apparently out of commingled accounts including customer funds. However, this same gift may also discourage any attempt by the defense to throw the parents under the bus: that $10 million gift is reportedly funding the defense team.

The sentence

Bankman-Fried faces seven specific charges, including variations on wire fraud, securities fraud, and conspiracy to commit those crimes. 

Even if convicted on all counts, he faces a potential total of 115 years in prison. But that number is almost entirely theoretical. In part, that’s because sentences for similar offenses would likely be served concurrently rather than successively, according to lawyers who spoke to CoinDesk.

The upshot is that even in a worst-case verdict, Bankman-Fried is more likely to be sentenced to something between 10 and 20 years in prison. For comparison, Elizabeth Holmes of Theranos infamy was recently sentenced to just over 11 years – though Theranos’ victims included largely very wealthy individual investors, so Bankman-Fried may be viewed more harshly by both judge and jury.

The future

However, even a 20-year sentence for fraud might not be the end of Bankman-Fried’s jeopardy. Five other charges, including allegations that he bribed a foreign official and broke US campaign finance laws, were previously dropped from the trial. Partly, that was because of procedural issues with Bankman-Fried’s extradition from the Bahamas.

But in July, the New York Times reported that prosecutors intended to mount a second trial on those five dropped charges in March. It looks like we could be doing this all over again in a few months.

Quotes in bold are our emphasis. Got a tip? Send us an email or ProtonMail. For more informed news, follow us on X, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.

The post Your guide to the Sam Bankman-Fried trial — starting today appeared first on Protos.

A bathhouse in Brooklyn has left users on Instagram and Twitter divided after it revealed that it is using bitcoin mining rigs to heat its spa. 

Bathouse posted its heating method — not to be confused with bitcoin mining pools — to Instagram on Wednesday, describing in three steps how the excess heat from its mining rigs is being used to raise the temperature of its pools.

• Step 1: Mine Bitcoin. Mining uses electricity for computing power and generates heat as a byproduct.

• Step 2: Send the heat generated by the miners to heat exchangers and heat our pools.

• Step 3: Enjoy a hot pool while supporting the Bitcoin network. The pools absorb the heat and circulate cool liquid back to the miners. The process repeats forever.

Read more: Bitcoin mining in Niagara Falls goes ‘brrr’ in all the wrong ways

Users split on Bitcoin spa

Instagram users who follow the Bathhouse account weren’t all sold on the idea. Indeed, one user posted, “This could easily be a post by The Onion,” while another complained, “So cringe — delete please.”

Another user went further, claiming, “This makes me like Bathhouse less. Now I’m concerned about who is mining this cryptocurrency, who is profiting from it, and whether I support that. We’re gonna need some transparency.” 

Some, on the other hand, reveled in the disdain users had for the mining-heated pools, while at least one seemed particularly happy with them, posting, “I for one think this is a great way to heat the pools and will check this place out because of this.”

Read more: Explained: Is Bitcoin good for the environment?

“Thank you for securing the network, helping resist authoritarianism, and bringing financial freedom to people while you heat your pools!” another said on Instagram.

Analysts from digital asset brokerage firm K55 have claimed that “repurposing waste heat from bitcoin mining lowers heating costs and reduces carbon emissions.” Whether this is the case for Bathhouse remains to be seen.

Got a tip? Send us an email or ProtonMail. For more informed news, follow us on Twitter, Instagram, Bluesky, and Google News, or subscribe to our YouTube channel.

The post Brooklyn bitcoin spa leaves crypto watchers hot and bothered appeared first on Protos.

Celsius founder Alex Mashinsky has filed an entertaining motion to dismiss New York Attorney General (NYAG) Letitia James’ lawsuit. NYAG is suing Mashinsky for operating an unregistered securities and commodities broker-dealer and defrauding investors out of hundreds of millions of dollars. Over 26,300 New York residents used Celsius Network.

Mashinsky, in an emotionally-charged retort, clapped back against almost all of her claims, claiming NYAG “parrots misinformation” with “baseless conclusions.” Instead of accepting responsibility for one of the largest frauds in crypto history, Mashinsky asserts that “circumstances outside of his (and Celsius’s) control led to a liquidity squeeze that resulted in Celsius pausing withdrawals and filing for bankruptcy.”

NYAG alleges Mashinsky misrepresented Celsius Network’s financial health and downplayed its exposure to FTX and Do Kwon’s Terra LUNA. NYAG’s case cites Mashinsky’s positive statements about Celsius’ ostensibly prudent, low-risk approach to finance. 

In reality, independent examiner Shoba Pillay detailed Celsius’ myriad similarities to a Ponzi scheme in a 476-page report produced for the US Bankruptcy Court for the Southern District of New York.

Mashinsky claims Celsius Network collapsed due to circumstances beyond his control. Celsius had invested heavily in projects by Do Kwon and Sam Bankman-Fried which, according to Mashinsky’s motion to dismiss, were impossible to identify as fraudulent prior to their collapse.

Terra USD (UST) experienced a spectacular meltdown in May 2022. It also used underhanded tactics such as depositing customers’ funds to Do Kwon’s Anchor Protocol, which the Terra USD meltdown wiped out.

Alex Mashinsky says Celsius was not a Ponzi scheme

Mashinsky’s motion to dismiss also claims the NYAG’s complaint parroted inaccurate information that had spread online and misrepresented its business model. He claims his descriptions of Celsius Network’s safety practices were mere “puffery,” and never meant to be taken seriously.

NYAG disagrees, citing the CEO’s statements as information on which a reasonable investor would rely when making an investment decision.

Read more: Celsius to sell crypto platform amid Mashinsky court battle

“Instead of acknowledging that Celsius’s eventual downfall was caused by a series of calamitous, external events, the NYAG pins all resulting losses on the alleged misstatements of Mashinsky,” he bemoaned.

Furthermore, Mashinsky says the NYAG failed to list any securities or commodities on the Celsius Network’s platform in her complaint. At least 40 state securities regulators investigated Celsius for violations. New Jersey and several additional state regulators have accused the company of offering unregistered securities.

Mashinsky also claims that Celsius Network was never subject to New York’s Martin Act, passed by legislators to deter fraud.

New York Attorney General Letitia James alleges that fraud played a major role in Celsius Network’s collapse. Founder Alex Mashinsky denies most responsibility. Overall, he claims he is a victim of circumstances beyond his control. He blames NYAG for taking his verbal statements out of context. Mashinsky has filed a motion to dismiss the lawsuit against him in Manhattan.

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The post Alex Mashinsky hints Do Kwon and SBF caused Celsius bankruptcy appeared first on Protos.