Trial of FTX founder Sam Bankman-Fried begins in New York
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On Wednesday, October 4, hearings began in New York against the founder of the cryptocurrency company FTX Group, Sam Bankman-Fried, reports Reuters. He accused in deceiving investors of the company, which went bankrupt in November 2022.
Prosecutors brought charges of fraud and money laundering against Bankman-Fried, 31. In particular, he is accused of using money from clients who stored it on the FTX cryptocurrency exchange to finance his hedge fund Alameda Research, purchase luxury real estate and donate to political campaigns and candidates in the United States. Bankman-Fried himself does not admit his guilt.
In their opening statement, lawyers for the former FTX chief tried to portray Bankman-Fried not as a fraudster, but as a “math nerd” who simply did not know what good business management was.
According to Mark Cohen, the young entrepreneur made obvious mistakes in managing the company, neglecting many risks and losing sight of financial problems. “Sam and his colleagues were simultaneously building the plane and flying it,” the lawyer said. “No one person—not one CEO, and certainly not Sam—could be everywhere at once and do everything.”
Prosecutor Thain Ren, in turn, insists on the premeditation of Bankman-Fried’s illegal actions. So, according to him, the entrepreneur deliberately took $10 billion from FTX clients and transferred these funds to Alameda Research, and when it began to incur significant losses in May-June last year, Bankman-Fried borrowed the same amount of money from clients. “The whole thing was built on lies,” Ren said. “He used his company FTX to commit massive fraud, and the money he spent to build his empire was stolen from FTX clients,” the prosecutor said.
As part of the trial, all close associates and former executives of FTX will testify. At the end of December, he was found guilty in a fraud case. recognized co-founder of FTX Gary Wang and head of Alameda Research and part-time ex-girlfriend of Bankman-Frida Caroline Ellison. In March, former FTX technical director Nishad Singh also admitted his guilt. All of them are cooperating with the investigation.
Prosecutor Ren said these people could shed light on what happened inside the company during its protracted collapse. Bankman-Fried’s lawyer said that his client’s former assistants can now simply “turn around” information about the decisions of the head of FTX, with which they themselves at one time agreed, and present them as deliberately fraudulent in order to avoid severe punishment.
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