The trial of Sam Bankman-Fried (SBF), the founder and CEO of FTX, a cryptocurrency exchange, has been one of the most anticipated events in the crypto world. SBF is accused of fraud, market manipulation, and money laundering by the US Securities and Exchange Commission (SEC), which claims that he used a network of shell companies and fake accounts to inflate the trading volume and valuation of FTX.

The SEC alleges that SBF created a fictitious entity called “Friend”, which he used to funnel billions of dollars into FTX through various intermediaries. The SEC says that Friend was actually SBF himself, or someone acting on his behalf, and that he used this scheme to deceive investors and regulators about the true size and profitability of FTX.

As customers began to withdraw assets from FTX in Nov. 2022, CEO and co-founder Sam Bankman-Fried asked his co-founder and CTO, Gary Wang, to calculate how much money Alameda Research would need to deposit on the exchange in order to cover the outflows.

Wang found that, excluding the accounts of Alameda Research, the sum of FTX customer balances matched the assets in FTX’s hot wallets, he testified on Friday under direct questioning from government prosecutors during the fourth day of Bankman-Fried’s criminal trial in New York. But, unbeknownst to him, there was a problem with his math.

Wang only got the full picture, he testified, once Bankman-Fried asked him if he had included “our Korean friend” in the calculations. Confused, Wang checked with Nishad Singh, another former FTX executive, who told Wang that the “Korean friend” actually referred to the $8 billion “fiat@” hole at the heart of FTX’s collapse.

SBF has denied all the charges and has maintained that FTX is a legitimate and transparent business that complies with all the laws and regulations. He says that Friend is a real person, who is a wealthy and private investor, who prefers to remain anonymous. He says that Friend is not affiliated with him or FTX in any way, and that he has no control or influence over Friend’s actions.

The trial, which began last week, has been full of twists and turns, as both sides have presented their evidence and arguments. The SEC has brought in several witnesses, including former employees, customers, and partners of FTX, who have testified that SBF was the mastermind behind the alleged fraud. The SEC has also shown documents, emails, and chat logs that purportedly show SBF’s involvement in creating and operating Friend.

SBF’s defense team has challenged the credibility and reliability of the SEC’s witnesses and evidence, and has argued that they are based on hearsay, speculation, and misinterpretation. SBF’s lawyers have also presented their own witnesses, including experts, analysts, and auditors, who have testified that FTX’s numbers are accurate and verified, and that there is no evidence of any wrongdoing by SBF or FTX.

One of the key points of contention in the trial is the identity and role of Alameda. The SEC claims that Alameda is a fake persona that SBF used to manipulate the market and inflate FTX’s valuation. The SEC says that Friend was responsible for about $8 billion of FTX’s reported $25 billion in daily trading volume, and that Friend also invested about $1 billion in FTX’s token sale, which valued FTX at $18 billion.

The SEC says that it has traced the source of Friend’s funds to several offshore accounts that are linked to SBF or his associates. The SEC also says that it has found evidence that SBF communicated with Friend through encrypted channels, using code names and aliases. The SEC says that SBF instructed Alameda Research on when and how to trade on FTX, and that he also rewarded Friend with discounts, bonuses, and insider information.

SBF denies these allegations and says that Alameda is a real person who acted independently and legitimately. SBF says that he does not know the true identity or location of some persons in Alameda, and that he only communicated with him through email. SBF says that he never gave any instructions or incentives to Friend, and that he only provided him with general information about FTX’s products and services.

SBF says that Alameda is a sophisticated and savvy investor, who saw the potential of FTX and decided to invest heavily in it. SBF says that Friend is not a puppet or a front for him or FTX, but rather a partner and a supporter. SBF says that Alameda’s trading activity was based on his own analysis and strategy, and that he did not manipulate or distort the market.

The trial is expected to last for several more weeks, as both sides continue to present their case. The outcome of the trial could have significant implications for the future of FTX, as well as the crypto industry as a whole. If SBF is found guilty, he could face hefty fines, penalties, and even prison time. He could also lose his control over FTX, which could affect its operations and reputation. If SBF is acquitted, he could emerge as a vindicated leader in the crypto space, who successfully defended his vision and innovation against regulatory overreach.