For this week’s episode, Chain Reaction (and Jacquelyn) did a crossover episode with Alex Wilhelm, editor in chief of TechCrunch+ and co-host of Equity, TechCrunch’s podcast focused on the business of startups. The highly anticipated criminal trial for Sam Bankman-Fried, former CEO of now-bankrupt crypto exchange FTX, started on Tuesday to determine whether he’s guilty of seven counts of fraud and conspiracy. Jacquelyn has been on the ground at the Southern District of New York court house, listening in to the trial in the same room as Bankman-Fried, so there was lots to talk about. We dove deep into what transpired the first two days of Bankman-Fried’s trial, as well as who the jurors are, the first two witnesses and who else is expected to speak. We also got into the nitty gritty details, which you can’t read about on a transcript.
For this week’s episode, Chain Reaction (and Jacquelyn) did a crossover episode with Alex Wilhelm, editor in chief of TechCrunch+ and co-host of Equity, TechCrunch’s podcast focused on the business of startups.
The highly anticipated criminal trial for Sam Bankman-Fried, former CEO of now-bankrupt crypto exchange FTX, started on Tuesday to determine whether he’s guilty of seven counts of fraud and conspiracy.
Jacquelyn has been on the ground at the Southern District of New York court house, listening in to the trial in the same room as Bankman-Fried, so there was lots to talk about.
We dove deep into what transpired the first two days of Bankman-Fried’s trial, as well as who the jurors are, the first two witnesses and who else is expected to speak. We also got into the nitty gritty details, which you can’t read about on a transcript.
Chain Reaction comes out every Thursday at 12:00 p.m. ET, so be sure to subscribe to us on
or your favorite pod platform to keep up with the action.
Jacquelyn Melinek 0:01
Hey everyone, its Jacquelyn Melinek. Welcome to chain reaction, a show that unpacks and dives deep into the latest trends, drama and news with some of the biggest names in crypto breaking things down block by block for the crypto curious. Hello, everyone, this week we're doing things a little differently. Instead of me interviewing a guest, you might know the guest, or maybe vice versa. But I have Alex Wilhelm here. He's the editor in chief of TechCrunch. Plus, he's also my boss, and he's the host of equity. And why are we here together today? Well, basically, I have been waking up before the birds before the sun at the crack of I don't even wanna say Dawn because it's before that to get in line for the highly anticipated criminal trial for Sam Bankman Fried for the crypto listeners out there, you might know but if not, He is the former CEO of the now bankrupt crypto exchange FTX. And it started on Tuesday to determine whether or not he's guilty of seven counts of fraud conspiracy, and some other ins and outs related to that. With all that said, if the jury finds him guilty at the end, right now, he is still presumed innocent, he can face up to 115 years in jail if convicted on all the charges. So it's been a busy week.
Alex Wilhelm 1:21
Wow. First of all, so a couple couple things about that one, I love what you said, we don't have a guest this week that you might know. Instead we have this other schmuck. Also he's the boss. Oh, my God, we've been looking forward to this trial for looking forward. anticipating this trial for
Jacquelyn Melinek 1:39
participating. Yes. It has been on our docket since we got the date back in January. I believe it's and this isn't the only trial there is going to be another one in March 2024. But that's on different charges. And we're not gonna talk about that today.
Alex Wilhelm 1:51
Yeah, but I have not been waking up in the pre Dawn hours to attend this court case. But I presume, Jackie, that you have to get up so early to get into the court because there is outside interest in the proceedings.
Jacquelyn Melinek 2:03
Yeah. So there's a lot of reporters who show up. And today I think I was like fifth in line. And yesterday I was also fit them. And we are recording this on Wednesday around 530 In the afternoon for context. On October 4, which is the second day of the trial.
Alex Wilhelm 2:18
I just want to point out that we're recording this leg. Jackie literally just got back to her computer, I sprinted back so she is as current as you can be today on the trial proceedings. But Jackie, you and I know the back start here because we were covering FTX before the implosion and during the implosion. And now in the wake of can you rewind the clock a little bit and just bring people back up to speed on some of the high? The high points, the most important points from the FTX. Saga?
Jacquelyn Melinek 2:49
Sure. So FTX was one of the largest crypto exchanges out there. It was called the third largest for the most part. Some people call it the second but the debate is up in the air about whether or not it was it was basically one of the biggest. And Sam Bankman Fried the co founder and CEO of FTX was a very prominent figure in the crypto space. That's like just a genuine true statement. He had advertisements everywhere. He had celebrity endorsements will they were paid celebrity endorsements. He was working with politicians he donated to politicians. There was a 60 minutes thing that just came out on Sunday that said he offered up to or he wanted to offer up to $5 million to have Trump not run for president. I mean, he had a lot of money. He was a billionaire. Before he was 30. Some people compared him to Warren Buffett which even at the time I found ridiculous for context. TechCrunch never did that. But basically Sam Bregman, fried or SBF as we typically call him in a casual tone, he ran FTX and he had a sister company or he was the parent company of another one called Alameda. Alameda research is the longer term and it's basically a crypto hedge fund that kind of traded cryptocurrencies. Yeah. And what happened here allegedly, is that every dollar that a customer deposited to FTX this is all alleged, went to a bank account and Alameda, Alameda then could use or SBF could then use to go buy real estate or endorsements or whatever he wanted to use the money for.
Alex Wilhelm 4:21
Yep, turns out fraud, same kind of thing, no matter if it's on the blockchain or on traditional Fiat rails. But FTX came out of nowhere. And in retrospect, to me, watching FTX become the giant it was at least putatively said to be at its peak when it was worth was it 30 To $39,000,000,000.30 to $32 billion backed by some big venture names. It seemed very fast to me. And in retrospect, that should have made my alarm bells go off more. But Jackie at the time, I mean, this was back when crypto was the opposite of where it is today. I mean, if we're in a crypto Winter today we were in a crypto summer then. And so it was the era of big money fast investments quickly built companies, new billionaires and SBF Sam was, you know, top of the Echelon thereof kind of basis of new money?
Jacquelyn Melinek 5:13
Yeah, you've got a point there. And that's actually something that the defendants lawyer Mark Cohen said today at the trial, he argued that one of the reasons FTX later collapsed in November of 2022, almost a year ago was because it grew so quickly. And that's why they didn't have a CFO or risk management's in control. And as startups do, this is all kind of his analogy, not me, as startups do, sometimes they grow really fast. And sometimes things break. And he was the CEO just creating two businesses that happened to break in the outcome of the crypto markets going crazy.
Alex Wilhelm 5:52
Man, I hope that lawyer comes and like explains to my boss when I miss a deadline, or don't hit a metric, and they can be like Alex is just as little boy, he didn't know what he was doing. We're gonna give him the most sympathetic reading. Well, Alex, you're not on trial. I'm not on trial. But I mean, to me that that rings hollow from the very beginning. Because one thing we've learned is that the company's backers were like, you should get a CFO, you should have neural finance controls. And he was like, yeah. And so it's not like that didn't occur to him, or there wasn't time. I mean, he had enough time to buy up an enormous amount of Bahamian real estate and spend 10s of 1000s of dollars at Margaritaville, or whatever the hell it was. Clearly there was. You can't attend every single high profile, get together with famous people that you bought your way onto if you don't have spare time. Hire a CFO and you're flying. Right. So Jackie, I know there was a lot more action on day two. And we're both very excited to talk about it. But I want to pause because we made you attend both opening the trial and many more to come. So day one was fewer fireworks, more procedure, but still important, because it picked I believe the jury.
Jacquelyn Melinek 6:53
Yeah, and you know, Alex, I was happy to attend even if it was bright and early in the morning, but day one was all about jury selection. SBF was there he came in a suit that was a little too big on him. And initially, the reporters and anyone who wants to watch was not allowed in the jury room just because of the sheer mass of jury selection. People that were there. It was too much. And so we were all putting overflow rooms to watch from like tiny little HP screens. But from the screen that day, you could tell one he got a haircut and to the suit was too big on him which I read that apparently the Wall Street Journal reported it was a Macy's suit, and that apparently another prisoner gave him a haircut. Just context there for you. But anyways, there were a lot of jurors who kind of either wanted to opt out it seemed you know, they were being as honest as possible. Some people said they had weddings other said they had travel booked that they couldn't get refunded. One person said that she actually was in that court herself with her husband for racketeering charges, and they got it dismissed. But it made her heavily distressed. She was in the nachos for jury. She was also trying to go to Maui for six months. So there's a lot of interesting characters. I know people call jury selection, very boring, but I think it kind of painted the picture of like, Who are these people that are going to be deciding the fate of SBF of whether or not he's guilty? And that's like a really big weight and responsibility. And this is like a guy who came from having everything in the world, being a billionaire talking to celebrities, having multimillion dollar homes, to the everyday American basically listening in, they probably don't know much about crypto, to be honest, most of them seems like they didn't some actually expressed concerns that hey, we don't know much about this. And now they are determining his fate. Yeah.
Alex Wilhelm 8:42
Well, jury of your peers does not mean jury of people who should attend intellectual spaces. You seem interested. Right.
Jacquelyn Melinek 8:47
Right. Right. And it's not to say these people aren't smart, you know. So in the end, they pick 12 jurors, and six alternates, basically, six alternates are the ones who come in if one of the 12 jurors have to get excused. And from that list, we had a physician assistant who has a career in medicine, another medical person who was a nurse, there was unemployed social worker, a divorce stay at home mom, I'm kind of reading off a list here. We had a train conductor, high school librarian, a USPS worker, a Bloomberg it worker. And then one of the most interesting ones to me, was a man who was born in Hong Kong, and he now lives in the States. He's retired. He's a former investment banker has no kids, his wife also has a banking career. And he went to Rice and Stanford. And he has non Hodgkins lymphoma. And he basically said, If anyone in here gets COVID, I can no longer do this trial, because that literally puts me at a huge health risk, which totally agree,
Alex Wilhelm 9:46
totally agree, but the person who has cancer who's gonna be on the jury?
Jacquelyn Melinek 9:50
Yes, he's the one from Hong Kong and he has the IB background, and he went to Rice and Stanford so I mean, those are definitely merits
Alex Wilhelm 9:59
dude Cancer can make it to jury duty all of my excuses in the past.
Jacquelyn Melinek 10:05
There's also a guy and I felt so bad who's on the alternate list. He works overnight at a hotel downtown. And he failed to disclose this when they were going through jury selection until after he was picked as an alternate, but his work schedule is 11pm to 7am. Juries typically nine to five and the judge who was typically friendly, you know, outgoing, we could get to that. He basically was like, You should have told us this before, maybe we would have dismissed you. But we've had people with worse schedules, so you'll make it work. Oh, this man is not gonna be sleeping for six weeks.
Alex Wilhelm 10:38
Oh, man, that's brutal. Okay, so day one juries put in place. We get that locked in. Now we can kick things off day two was opening statements.
Jacquelyn Melinek 10:47
Yes. So day two in the morning, they actually finished the jury selection, kind of what we got into, but then after that, it was the opening statements where the prosecutor spoke first. And basically the prosecutors kind of took the angle of lies and fraud, and they kept repeating billions of dollars taken, you know, billions of dollars from customers. He took the money and this is all their words alleged. He said he used the money towards real estate, family, friends, political influence, etc. And he kept saying they he lied SBF lied. And he took money. He didn't have basically all your money from the investors, the everyday person using FTX, not everyday person. These are crypto people, you know,
Alex Wilhelm 11:31
to everyday, you know, said with love and affection.
Jacquelyn Melinek 11:35
And I would say the prosecutors angle was a little more accusatory, which would make sense. They also showed old photos of him during the opening statement, and also during the witness part, which I think was done because he's showing up to court and he has this haircut. He's in a suit that's a little big on him. But he looks a lot lot more cleaned up than his time when he was FTX. And so basically, the prosecutors are showing you this was the man who was in charge, kind of not looking like the guy who's sitting here today, which they might have cleaned up for PR purposes. Yeah. Can I just say that? You used to love it his fits, I know.
Alex Wilhelm 12:14
But I will say that sandbag been freed was for a very short period of time, the Paragon the archetype of slacker attire, and I was very proud of you. Honestly, we had someone who was hanging out with like ex presidents who looked terrible,
Jacquelyn Melinek 12:30
and actually did use that photo of him at the crypto Bahamas conference of the FTX hosted with him, Tony Blair and Bill Clinton, and it's him on stage. And honestly, I don't even remember his hair looking like that. But it was like, massive, frizzy thing on top with a white t shirt and cargo shorts. So they really, they really pulled out the photos. I'll just
Alex Wilhelm 12:51
say, next time we get a fashion icon. I hope they don't get in trouble for allegedly multibillion dollar fraud and so forth because he sets lockers back
Jacquelyn Melinek 13:01
fashion icon is an interesting choice of words.
Alex Wilhelm 13:05
How dare he let me down is my point. Okay, so the vibes are what I'm very curious about because courtrooms are famously a little bit dry and procedural. Let's talk. Clearly the prosecution has a case to make. And the defense wants to point out that he's just a wee little boy who got lost and didn't know he needed to see if all right, but the judge you mentioned the judge having a relatively interesting effect. I'm curious about how that impacted the overall feel of things.
Jacquelyn Melinek 13:30
So the judge, Judge Lewis Kaplan, he's a federal judge of the Southern District of New York, if you want to look him up, that's him. He was very jovial, very friendly, very straight, but very straightforward. He would crack jokes about how he's not good at using computers and how certain people excuses weren't that good. Like he wouldn't say that directly. But he would be like, you have your husband's co workers wedding. And then like people would laugh, you know, so he was definitely more funny. I will say, I noticed in the beginning of day two when he cracked jokes, sandbag, panfry did not laugh. He just like stared straight ahead. I was in the room among about 12 other reporters. And I had like a direct view of him for the first half of the second day. So I watched his every single movement, while the whole trial proceedings were going on and SBF basically sat there looked pretty straight. He had a laptop in front of him with a screen protector, which from the side you can't see but later on, I was sitting behind him and you can't see the screen. So the screen protector only protects so much. And basically, he was constantly shaking his leg under the table which is not visible to the public eye, but because of the angle I had you saw that and that's like something of his you know, he's always fidgeting always moving around, and he also kept biting his lip. And like kind of like sucking on it. I don't even want to I don't even know how to explain that properly. And then when the jurors came in, when prior to them being selected, he kind of looked straight ahead, but you could tell he was looking out of the corner of his eye to look at them. And then after the jurors were selected very, very strangely, he kept looking at a sheet of paper looking at his screen and then staring intently at the jurors creepy. Yeah, he was staring like full on trying to make eye contact with them. Then at one point, I didn't seem smart at one, you know, I don't know what the jurors response was if they smoked back or
Alex Wilhelm 15:27
it's very rare that I have to say this, but we should apply some rules I learned in rehab to the courtroom, because one of the things that was banned, and rehab was quoting mad dogging. And I didn't know what that meant. But it turns out, it's what you're saying when you just stare at someone lock eyes and then in a threatening manner. If I Was the defendant, though, I don't know if I would do that to the people who can give me up to 115 years in prison.
Jacquelyn Melinek 15:51
Yeah, and I'm not sure he was doing it in with the purpose of intimidating them. Because I've seen photos of me on stage at panels where I look so angry, but I'm actually just, you know, listening. So I'll give him the benefit of the doubt there, you know, but yeah, he did like squinty eyed at the jurors like he was kind of like trying to see who they were. And he had this like 1000 Yard Stare. For most of the trial, he was just staring straight ahead with his hands crossed on his laptop unless he was typing. And he looked down his papers, you know, and really the only person he made eye contact with aside from the wall straight ahead, or the judge was his main lawyer, Mark COVID. Even if other people were talking around him, he was looking at Mark to speak to mark the whole time, I would argue, and also it's important to mention that his parents were in attendance. And they were sitting two rows behind me initially, his mom and dad were there. The mom has really short black hair, she had some earrings on a gold necklace. And she also had a notepad with her a yellow notepad. And she was writing away incessantly and the dad, which makes sense, had a frown on for the most of it. And he also had a bench full of quote unquote family members is how the Security offers like referred to them when they sat them down. They're like, Oh, for the family of Venkman. Fried. So I don't know who the others were. But yeah, if you're curious why
Alex Wilhelm 17:13
Jackie has so many interesting, frankly, details on SBF's parents and what they were wearing and so forth. It's because I was sitting there because they banned for nearly everybody laptops and phones inside the venue. Which means that Jackie has been going back to the Stone Age every day to sit there for how many hours a day.
Jacquelyn Melinek 17:33
It starts around 930 ends around 435. So it's it's a whole workday, whole
Alex Wilhelm 17:38
workday of a crypto reporter with paper like it's like, yeah, I didn't set out to torture Jackie all week long, but appears that's what I'm doing. Because she has to just sit there and listen to the court. Oh, God.
Jacquelyn Melinek 17:53
I've never written down so many details in my life. I mean, it's actually kind of fun, because it's okay, fun, as fun as fun it can be, you know, but the details I think kind of make the story like you could all read the transcripts. But you don't know the fine little things that were going on there. You don't know that he was shaking his leg under the table or how he was looking at the jurors. Unless you're physically in the room. And that's not to attack you. Alex is holding up his hands.
Alex Wilhelm 18:24
It's totally fine. I just wanted to point out that I'm not trying to criticize you. I'm trying to say that it's interesting to see the different things. Because if you were out on your laptop, you will be answering his tweets, you would feel the need to live tweet it right. Yeah. It's cool to see that's what I'm trying to get at like the different result of going Stone Age in this trial
Jacquelyn Melinek 18:46
of not having a phone to distract you at every waking moment. Yes.
Alex Wilhelm 18:50
I don't know what that's like, you should go to a trial. No, no, thank you. Well, the IPO markets way more boring than the crypto market when it comes to legal proceedings, at least in my experience. Okay, so it talks about day two talks about the vibe. I'm curious, is it been anything that surprises you here? Because so far, this is all very interesting, very important, but nothing that I'm like, Oh, shit, that's not what I expected.
Jacquelyn Melinek 19:13
Hmm. I was surprised by the first witness. I've heard from other lawyers, that it should always be started off extremely strong. And it should end really strong. So everyone was whispering like, who's it going to be? Is it going to be Caroline Ellison, which is the former CEO of Alameda and SBS on and off girlfriend has how they phrased him they're not together anymore. Well, maybe not obviously. Who knows?
Alex Wilhelm 19:37
Actually, can we pause and talk about that for a second? Because it's not just a trauma? Briefly. Yeah. Briefly, because I think it does show why people expect her to be there as a possible witness. Because after Sam was taken into custody, given house arrest, he leaked something.
Jacquelyn Melinek 19:54
Yes, so SBF leaked. Caroline Ellison's google doc die. Erie to The New York Times I think he had about 100 phone calls with them. And basically what happened during that period of time is they talked about the diary, he got access to it. And New York Times published an article on it. And it basically illustrated Caroline Ellison as someone who was not secure in their role she was upset. She was incapable is basically what I think he was trying to paint a picture. And for reference, Caroline Ellison among two other executives, and really close friends of SBF are, you know, going to be witnesses or quote, most likely government, they're cooperating. We know that Gary Wang, who is the co founder of FTX, who was one of those three people I just mentioned, is speaking on Friday, which we will get to later. And yeah, so as a result of him leaking, that he got his bail revoked by Judge Kaplan, and he got sent to the jail in Brooklyn. I think it's the MDC metropolitan detention center. Those are the details.
Alex Wilhelm 21:02
So now back to witness number one. Yes.
Jacquelyn Melinek 21:05
So witness number one came on around like 3:30pm 3pm. And his name was Mark Antoine Julliard, and if that name does not ring a bell, it did not for anyone in the courtroom, either. Okay, good. Yeah, I know, everyone was writing it down. And then he walked in. And some of us were whispering like who's like who? You know, and it's not to diminish the witness, but it's just the fact that he is a user of FTX? Or was I should say, well, he still is because he still can't withdraw his funds. And basically, he is from Paris grew up their lives in London. Now. He's a commodity trader and a cocoa bean broker. He trades the commodities of cocoa, just for context. And basically, the way the prosecutors painted it back and forth conversation, he bought crypto on FTX. Because he believed and trusted in it. He saw the ads about FTX. He followed FTX on Twitter and SBF. On Twitter, sorry, or x. I'm calling it Twitter, because they called it Twitter in court. Okay. And he described SBF as one of the leaders of the industry. And he assumed he could trust FTX exchange. So he used it. Yeah.
Alex Wilhelm 22:20
But just thinking back to your point about starting strong Indian strong. It sounds like what they're trying to do. Here I am with my speculating head on, pointed out that this is not just an intra FTX issue, but it's an assessment that impact real people around the world. Yes. And so show the harm, maybe and then show the alleged malice.
Jacquelyn Melinek 22:43
Yeah, so mark, Antoine actually deposited about 100,000 pounds, which is like 140k US dollars. That's the math they said on stage. Who knows if that's exactly correct, but that's how much he deposited. And then it lowered to, you know, about 52,000, based on market movement. And then, when FTX was collapsing, he talked about how he read SBF tweets, that was saying all the assets are fine, don't worry about it. And that was November 7. And then he said he tried to go on November 8, to deposit funds, and it never worked. So his funds are still sitting in.
Alex Wilhelm 23:24
And he tried to deposit funds. Oh, no, sorry. Sorry, withdraw. Okay, cool. I'm
Jacquelyn Melinek 23:30
like this guy had Yes, withdraw. Oh, my gosh,
Alex Wilhelm 23:33
he was trying to deposit withdrawals, but it didn't work out. So essentially, again, we have ft X's actions and words, setting the market expectation. And then the rug being pulled out from under this met this person and a bunch of other people. Yes, allegedly.
Jacquelyn Melinek 23:48
Yes. And so one part that stood out to me that was pretty interesting was when Mark Cohen SBF lawyer did like the cross examination, he asked him like, how much of it was of your savings. And he asked if it was like 70%. And Mark Antoine was like, I don't know the exact percentage, but it was a significant amount of my savings. And so for the jurors, I don't know their financial status or anything, of course, but for some 100,000 might be like more money than they've ever seen. And for some, it might be like nothing. So I think the context that this witness provided, basically saying this was a lot, if not majority of my savings. And now I can't touch any of it was I think was definitely worth noting
Alex Wilhelm 24:33
was the defense lawyer trying to argue that it wasn't that much of his money, so we shouldn't feel that back. I
Jacquelyn Melinek 24:40
think he was trying to see because he said he's never met him before. So it's not like he knew how much that what yeah, maybe I don't know. Why not. We should get him on the podcast.
Alex Wilhelm 24:48
It's an interesting strategy. Did you lose all of your money? Tell me you did. Now it's not my clients fault. Like that's, that's not a lawyer but like just off the top. It doesn't sound
Jacquelyn Melinek 24:58
reasonable to me and also So Mark Cohen's kind of argument was, like you knew that crypto was risky, you can make a lot, you could lose a lot. And then the prosecutors actually came back up again. And they asked him, when you invest it on FTX, did you see the risk of it? No. And then they asked, Did you see the risk of crypto? And of course, he said, Yes. So I was like, the risk is within buying crypto not putting your money on that platform. Like when I put my money in my bank account. I'm not like, I really hope today, Chase doesn't withdraw at all, or like, stop me from withdrawing any money. You know, like, Yeah,
Alex Wilhelm 25:36
I think that's a really interesting strategy that didn't go well, for the defense. Yes. Also, it's not like his money went down by 50%. And then he tried to sue FTX. For his investments losing value. He lost his money, because FTX allegedly didn't have it anymore. Yeah, that's, that's not good. Can I throw a beef into here that I annoyed with, please, this was not a run on the bank. There's been some tweets that I've been seeing some people making that argument. And exchange is not a bank. They're not the same thing. Mike
Jacquelyn Melinek 26:09
Cohen made that argument as well, that it was a run on the bank during his opening statement was he basically argued that because of a competitor who put out a tweet, and then the coin, desk article, and so on, it's not
Alex Wilhelm 26:21
a run on the back, I can write an article tomorrow, calling it a green washing tub, and it still would not be a verdant thing for washing clothes, it was still being exchanged. And that's what was marketed as that's what its services were. And I think Ron on the bank tries to flip the script and make it seem like it wasn't his fault. He was doing fine. It was external forces that allegedly brought this thing down, not gonna say House of Cards, that is
Jacquelyn Melinek 26:45
actually a point that he was making that the crypto market volatility, combined with the not proper enforcement being there before the market started to collapse, you know, whether it was having no risk control, or CFO. And apparently he told Caroline Ellison to hedge their funds, because he had a feeling that it wasn't going to go well. And they blamed her and said she didn't hedge. Therefore, that is why the collapse was so big for FTX. Because had they hedged, maybe it wouldn't have been this bad.
Alex Wilhelm 27:17
Yeah, but all that's downriver from the US good use of customer funds at his prop trading desk. Right. Not to mention a lot of other stuff like it is they you spent money on a lot of things that were non core and had nothing to do with a lack of hedging at the hedge fund side business. So the more I keep hearing the defensive strategy, or the commentary around why he may not be as guilty, as many people think he is, I don't find a lot of value there. I don't I don't see the argument that's changed my view of the behaviors and the activities and, and so forth. You and I have read a lot of documents about this company to match. No, I wouldn't say too many. I think we got a couple more in us. I'll be very curious how this trial goes. And that's kind of what I want to talk about next, which is just apart from making you go to the court again, tomorrow. What's what's coming up like six weeks trial and what happens next? what's the end game?
Jacquelyn Melinek 28:18
Yeah, so they are anticipating six weeks. The judge hopes it's less he says, he thinks is a bit long, but who knows. And the lawyers are anticipating six weeks on both side. So at the end of the day today, around 4pm, they brought in the second witness adding mudita. For context. He is a longtime friend from college of sandbank memory, they went to MIT together, and they remain friends after he worked for Alameda for a bit. And then he went back to finish his PhD. And then he worked for FTX Software Engineer for him. And he described it as a quote, close friendship. Because you know, I have everything written down. He was with us for defense. He was a witness for the prosecution. Oh, he said him and SBF hasn't spoken since November 2022 when this all happened, and he also lived in the house with SBF that infamous house with 10 people they called it a Polly cool. He didn't say he was a part of it. But it was a $35 million penthouse in the Albany community in the Bahamas.
Alex Wilhelm 29:20
Yes, but it was the hedging. That was the problem.
Jacquelyn Melinek 29:24
He we didn't get to that today. But also, interestingly, I think this important note, Adam mentioned he did not have a subpoena to be there. But he did get an immunity order, which basically means it protects him from being prosecuted, as long as he's telling the truth. If he doesn't tell the truth, then he could be prosecuted. That's the best deal ever. Yeah, well, and the reason he said he did that, you know, back and forth through the conversation is because he wouldn't have testified because he was, quote, worried the code he wrote would have committed to a crime.
Alex Wilhelm 29:54
Oh, interesting. So he's worried that if he wrote the magical thing that took the money from that six customers and gave it to Allan may You know, he could be accessory to the if you make the pipe
Jacquelyn Melinek 30:03
Oppenheimer with the Atomic bomb. He made the bomb, but he didn't put off the bomb. I don't know. We don't know if Adam actually created the code that gave SBF this quote unquote special button to take any money from LME. I'm just
Alex Wilhelm 30:15
saying that I imagine estimation which if you were a developer there you might be worried about
Jacquelyn Melinek 30:20
Yeah. And, and I get that because we've seen that in other cases where, you know, developers who created crypto products and services like that crypto mixer, tornado cash, they've been kind of arrested for that not kinda they have been arrested.
Alex Wilhelm 30:34
Crypto mixer. Sounds like we're getting drinks. Oh, my
Jacquelyn Melinek 30:37
God anyways, anyways, so that happened today that will finish up tomorrow, October 5 on Thursday. And by the time this episode comes out, his whole testimony will probably be over which maybe you'll see some live tweets about it. But as for Thursday, and Friday, we overheard the prosecutor asked the judge if we're good to go on the following witnesses. One was Adam, you Delia that we just mentioned. Another was Matt Lange, who is the co founder and Managing Partner of paradigm, which is a, quote, research driven technology investment firm. I'm pretty sure it used to say crypto investment firm, but you know, to each their own. And then before we get to that last one is Gary Wang, the co founder of FTX, which I'm sure will take up a lot of time. Yeah. Gary Wang is one of the people who agreed to a plea deal, which means he's fully cooperating with the government supposed to tell the truth. And we'll definitely be testifying I guess SBF to save his own. But well,
Alex Wilhelm 31:39
I wonder if SBF is going to at the end of this wish that he had not tried to plead not guilty, but we will see because the wheels of justice will grind on. And Jackie, where should people go to stay up to date on all things SBF trial, if they're big fans of yield? TechCrunch?
Jacquelyn Melinek 31:54
I would say obviously, techcrunch.com you could look up my name Jacqueline melanic. And then I am trying to tweet as much as possible when I get my phone back outside of the courtroom. So you could follow me on Twitter at JCQMELINEK, which is Jack melanic. And yeah, that's where we're at.
Alex Wilhelm 32:14
If you're listening to this podcast, and you don't follow Jackie, shame, for sure. Yeah. For weeks to bring you the news, the least you could do is follow her on Twitter. We're not gonna call it
Jacquelyn Melinek 32:24
EQT. So weird little details. I mean, how are you going to know about
Alex Wilhelm 32:27
SBS moss? Yeah, well,
Jacquelyn Melinek 32:30
actually, everyone's hair cut.
Alex Wilhelm 32:32
I just want to close out by saying jacket thank you for for doing this. I'm glad the trial is local to you making this a lot easier, but it is still an enormous pain in the butt to do all right. So I appreciate it. And you doing it means that I don't have to. So thank you.
Jacquelyn Melinek 32:47
Week one is going well asked me again in week two or three of them if I'm missing sleep, but Yeah, Alex, thank you for talking to me about this and letting me spew all these details out to you for all our chain reactions slash equity listeners out there. You can find us on Spotify, Apple, and you can look us up at chain underscore reaction on Twitter, and then me on Twitter as well at JC que me liek and Alex on Twitter at literally just Alex. Yep.
Alex Wilhelm 33:15
Well, I mean for the last eight people who are still there, but yes, thank you. Thanks for having me. I'll talk to you soon.
Jacquelyn Melinek 33:19
Yeah, thanks. We'll be back every other week with interviews with top players in the crypto ecosystem. Catch us on Thursdays for interviews with experts in the web 3d space. You could keep up with us on Spotify, Apple Music or your favorite pod platform and subscribe to our companion newsletter also called chain reaction. Links to the newsletter and the stories we talked about can be found in our show notes and be sure to follow us at chain underscore at reaction on Twitter. Chain Reaction is hosted by myself and produced by Yashad Kulkarni and Maggie Stamets with editing by Kell. Bryce Durbin is our Illustrator Alyssa stringer leads audience development and Henry Pickavet manages TechCrunch's audio products. Thanks for listening. See you next time.
Transcribed by https://otter.ai