On Tuesday, the founder of the FTX cryptocurrency exchange and former billionaire Sam Bankman-Fried will appear in court. He will be responsible for a multi-billion-dollar fraud that, according to investigators, he committed to the detriment of stock exchange customers.
The trial of an ex-billionaire and former cryptocurrency magnate will begin on Tuesday in Manhattan. Experts say Bankman-Fried faces an uphill legal battle. Three of his closest associates pleaded guilty and are cooperating with prosecutors who have collected millions of pages of evidence. This includes spreadsheets that the government says “track illicit money flows.”
Accused of fraud
The FTX founder’s defense seems to focus on technical issues. He blames accounting errors and mistakes by colleagues, while suggesting that outside law firms authorized his actions. His legal team also argued that he had trouble accessing documents from prison, which is grounds for a potential appeal.
The trial also gains additional publicity thanks to writer Michael Lewis. His book about Bankman-Fried, “Going Infinite,” is published on Tuesday. Lewis told “60 Minutes” that his subject was a fascinating character study: “He was a person who set out in life to maximize the consequences of his actions – no matter what the intentions were,” Lewis said. “And it had exactly the opposite effects from those he planned. So it looks like his life is a cruel joke.”
Cryptocurrency exchange collapsed
FTX filed for bankruptcy in November after CoinDesk reported that its sister trading firm, Alameda Research, held the exchange’s native FTT token as a significant portion of its portfolio. Rival exchange Binance then announced that it would sell all of its token holdings, leading customers to begin withdrawing their funds from FTX.
FTX founder and CEO Sam Bankman-Fried was arrested in the Bahamas the following month and extradited to the United States, where he was charged with eight counts of fraud.
Prosecutors said Bankman-Fried planned the financial fraud. In January, Bankman-Fried was accused of illegally transferring money from FTX clients to the trading firm he founded, Alameda Research.
The former billionaire was released on $250 million bail, but in August he was sent to MDC, a prison known for poor conditions, after a judge found there was a likelihood of witness tampering. Bankman-Fried was accused of leaking diary entries from former partner and co-CEO of Alameda Research Caroline Ellison in July, which prosecutors say constituted an attempt at fraud.
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