The criminal trial of Sam Bankman-Fried, the founder of FTX, commenced in a Manhattan courthouse on Tuesday, marking the beginning of a high-profile case against the cryptocurrency entrepreneur. Bankman-Fried faces a range of charges related to what prosecutors have characterized as one of the biggest financial frauds in American history.
Here are the key points to know about Sam Bankman-Fried and the extensive fraud case against him:
Charges Against Bankman-Fried:
Sam Bankman-Fried is facing a litany of charges in two separate trials. The current trial, which began on Tuesday, includes charges of wire fraud, conspiracy to commit wire fraud, securities fraud, money laundering, and conspiracy to make unlawful political contributions and defraud the Federal Election Commission (FEC).
In a second trial scheduled for March 2024, Bankman-Fried will face additional charges, including securities fraud, conspiracy to commit bank fraud, and conspiracy to bribe foreign officials.
The charges revolve around allegations that Bankman-Fried misappropriated customer funds to support his cryptocurrency firm, Alameda Research, and to fund substantial campaign contributions. Prosecutors contend that he used Alameda and FTX funds to make contributions in the names of other executives to gain favor with political candidates.
Bankman-Fried is also accused of making false and misleading statements to investors regarding his company’s financial health and its ties to Alameda.
Bankman-Fried’s first criminal trial got underway on Tuesday with jury selection, and it is expected to last up to six weeks. Four former FTX executives who have previously pleaded guilty to charges related to the company’s collapse are expected to testify against him. These witnesses include Caroline Ellison, the former CEO of Alameda Research and Bankman-Fried’s ex-girlfriend, as well as Gary Wang, a co-founder of FTX. Both Ellison and Wang pleaded guilty to fraud charges and agreed to cooperate with the investigation.
Nishad Singh, FTX’s former director of engineering, and Ryan Salame, another FTX executive, also pleaded guilty and agreed to cooperate with prosecutors in their respective cases.
Initially, Sam Bankman-Fried was released on $250 million bail and placed under home detention while awaiting trial. However, U.S. District Judge Lewis Kaplan revoked his bail and ordered him back to jail in August, citing probable cause to believe that he tampered with witnesses at least twice following his arrest.
Prosecutors accused Bankman-Fried of harassing Caroline Ellison, his ex-girlfriend and the former CEO of Alameda Research, by sharing her personal writings with The New York Times, attempting to intimidate witnesses through comments to the media, and making efforts to contact a former FTX employee.
Bankman-Fried’s trial is a closely watched case, given his prominence in the cryptocurrency industry and the severity of the charges against him.