The trial for FTX founder Sam Bankman-Fried kicked off today, nearly one year after the collapse of his crypto exchange following an alleged fraud of $8 billion dollars.The 31-year-old former billionaire will face a jury in a Manhattan court on accusations that he embezzled from FTX customers to fund his Alameda Research and buy luxury properties.
He launched the company in 2019 and it quickly grew into an enterprise worth tens of billions of dollars.But the company suffered a catastrophic collapse in November 2022, leaving customers roughly $10 billion out of pocket, prosecutors claim. The saga shocked markets and tattered SBF’s once god-like reputation within the crypto industry.A bombshell trial is expected to feature his ex-girlfriend and former top lieutenant, Caroline Ellison, 29, as the prosecution’s star witness.The trial, overseen by Judge Lewis Kaplan, is slated to begin with jury selection at 9.30am on Tuesday.
Bankman-Fried has acknowledged inadequate risk management but denied stealing funds. His lawyers have signaled in court papers they plan to argue that FTX’s treatment of customer funds was proper, and that others at FTX and Alameda bore the bulk of the blame for their failure.The trial is expected to last up to six weeks. It will feature testimony from three former members of Bankman-Fried’s inner circle, including Ellison, who have pleaded guilty to fraud charges themselves and agreed to cooperate with the Manhattan U.S. Attorney’s office.Bankman-Fried’s lawyers have signaled they plan to challenge the credibility of those witnesses, who also include former FTX executives Gary Wang and Nishad Singh, by arguing they are motivated to implicate their client to get a lower sentence for themselves, a common strategy in white collar fraud cases.
The case has been likened to the trial of Theranos fraudster Elizabeth Holmes, who was jailed for 11 years for defrauding investors in her medical company out of $945 million.
Potential jurors in Bankman-Fried’s case are expected to be asked whether they have a negative view of crytpocurrency, and whether they have any experience with ADHD, a condition Bankman-Fried has.Prosecutors say Bankman-Fried built that reputation on lies and bolstered it with endorsements from celebrities and star athletes.
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Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn since Aug. 11, after the judge found he had likely engaged in witness tampering including by sharing Ellison’s personal writings with a reporter.
He will be brought to court early on most days to allow him to prepare with his lawyers.