The FTX founder, Sam Bankman-Fried’s trial opened on Wednesday, October 4, with accusations him looting billions of dollars of customers’ money to fund his lavish lifestyle. Bankman-Fried’s lawyer Mark Cohen told the court that the crypto tycoon made mistakes but acted “in good faith.”
The trial according to The New York Times is scheduled for six weeks as Bankman-Fried faces seven criminal counts, including securities fraud and money laundering and if convicted, he could receive what would amount to a life sentence.
The 31 crypto mogul, became a billionaire overnight, only to see his company collapse last year and his fortune evaporate. He has been charged with orchestrating a conspiracy to use $10 billion that FTX’s customers had entrusted to him for all manner of personal projects, including venture capital investments, political donations and luxury real estate purchases.
“It looked like Sam Bankman-Fried was on top of the world,” Thane Rehn, the lead prosecutor, told a packed courtroom at the US courtroom in Manhattan saying, “All of it was built on lies.”
Bankman-Fried’s lawyer, Cohen, soon replied, “It’s not a crime to run a business in good faith that ends up going through a storm.” He called the prosecution’s portrayal of his client a “cartoon of a villain” that distorted the facts.
When FTX collapsed in November 2022, Bankman-Fried became a symbol of the industry’s excesses. At the height of its power and influence, FTX was valued at $32 billion and Mr. Bankman-Fried was widely hailed as a leader capable of bringing obscure crypto technology into the mainstream of global finance. He jetted back and forth from FTX’s base in the Bahamas to meetings in Los Angeles and Washington, where he rubbed shoulders with celebrities and politicians, and had his photograph plastered on billboards and magazine covers, according to The New York Times online magazine.
Now FTX is bankrupt and the crypto markets have cratered, leading to dozens of lawsuits and tens of billions of dollars in losses that have devastated the finances of individual investors around the world.
The opening statements began shortly after the judge overseeing the case, Lewis A. Kaplan, swore in a jury of nine women and three men. During the selection process, one prospective juror said he and his twin brother had lost money in the crypto market, while another said she worked for a financial firm that had lost funds with FTX and Alameda. Both were excused.
A third candidate repeatedly said he didn’t know if he could be impartial because he didn’t understand how cryptocurrencies worked.
“You probably have a lot of company in this courtroom,” Judge Kaplan responded.
The prospective juror, who was excused, said the whole concept of crypto rubbed him the wrong way, reminding him of the Ponzi scheme carried out by the disgraced financier Bernard Madoff.
After the jury left, Cohen, Bankman-Fried’s lawyer, raised the issue of his client not getting the appropriate dosage of Adderall, which treats an ailment known as Attention Deficit Hyperactivity Disorder (ADHD) a condition that affects people’s behaviour. Persons with ADHD can seem restless, may have trouble concentrating and may act on impulse.
The judge said that was supposed to be addressed in a prior order of his and Bankman-Fried was set to return to the Brooklyn jail where he’s been held for the last few weeks before trial.
Credit: The New York Times