New York – The trial of FTX founder Sam Bankman-Fried began Tuesday in a Manhattan federal court. Bankman-Fried, 30, faces seven counts of conspiracy and fraud for allegedly misusing billions of dollars of customer funds before the cryptocurrency exchange collapsed in November.
Prosecutors claim Bankman-Fried secretly transferred FTX customer deposits to Alameda Research, a cryptocurrency trading firm he founded in 2017. They accuse him of lying to investors and clients about Alameda’s financial condition and FTX’s reliance on customer funds.
“Sam Bankman-Fried is innocent and will be exonerated at trial,” defense attorney Mark Cohen said Monday. “The prosecution’s case depends on cherry-picked evidence and unsupported conclusions about Mr. Bankman-Fried’s motives.”
If convicted on all counts, Bankman-Fried could face up to 115 years in prison. The trial before Judge Lewis A. Kaplan is anticipated to last four weeks.
Bankman-Fried’s attorneys are expected to argue he acted in good faith without intent to defraud investors or misuse funds. But prosecutors are likely to present emails, financial records and testimony suggesting Bankman-Fried was aware of wrongdoing at FTX and Alameda Research.
The trial is being closely watched in the crypto industry and by financial regulators. The decentralized nature of cryptocurrency has limited oversight, but the collapse of FTX has heightened calls for reform. The verdict could influence Congressional action on crypto regulation.
