FTX founder Sam Bankman-Fried's US trial explained

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1 年前

STORY: Sam Bankman-Fried is going on trial on fraud charges in New York starting on October 3.

This comes nearly a year after FTX, the cryptocurrency exchange he founded, collapsed and declared bankruptcy.

The 31-year-old is accused of stealing billions of dollars in FTX's customer funds.

Federal prosecutors say he used the money to plug losses at Alameda Research – which was a crypto-focused hedge fund that he also owned – and to buy luxury real estate and donate tens of millions of dollars to U.S. political campaigns.

The former billionaire has pleaded not guilty. He has acknowledged risk management failures at his companies, but says he never intended to steal any funds.

Now, his lawyers are expected to argue at trial that Bankman-Fried thought FTX was allowed to make investments with customer funds, just like banks used deposits to make loans.

His lawyers are also expected to try to pin most of the blame for the failures of his businesses on others.

Three former members of Sam Bankman-Fried's inner circle have pleaded guilty and are set to testify against him at trial.

That includes Caroline Ellison, Alameda's former chief executive officer and also Bankman-Fried's on-and-off romantic partner.

Now, the trial is expected to last about six weeks. In order to get a conviction, prosecutors must convince the jury beyond a reasonable doubt both that Bankman-Fried defrauded FTX's customers and also that he knew at the time that what he was doing was wrong.

Bankman-Fried is going to be traveling to and from court each day from the Metropolitan Detention Center in Brooklyn, which, of course, is a far cry from the $30 million penthouse in the Bahamas where he was living up until his December 2022 arrest.

A judge jailed him in August after finding that he likely tampered with witnesses at least twice, including by sharing Ellison's private writings with a reporter.