Home » Crime and Fraud • US business news » FTX Crypto fraud trial: Prosecutors say Sam Bankman-Fried built an empire “on lies”
FTX Crypto fraud trial: Prosecutors say Sam Bankman-Fried built an empire “on lies”
https://www.whatjobs.com/news/business-crime-and-fraud/ftx-crypto-fraud-trial-prosecutors-say-sam-bankman-fried-built-an-empire-on-lies
By Nithya Bose in Crime and Fraud, posted October 5, 2023
FTX founder Sam Bankman-Fried's fraud trial has opened, with prosecutors accusing him of building his empire “on lies.”
The former cryptocurrency star is accused of living a lavish lifestyle while defrauding customers.
Bankman-Fried is the founder of cryptocurrency exchange FTX and hedge fund Alameda Research.
Read More: US Presidents’ Spiritual Advisor Was Jailed For $3.5 Million Fraud
He faces charges related to financial crimes following the collapse of his companies, including wire fraud and money laundering conspiracy.
Prosecutor Thane Rehn portrayed Bankman-Fried as someone who lived a glamorous life while allegedly defrauding investors.
They claim his wealth and celebrity connections were built on lies.
Federal prosecutors accuse him of diverting billions of dollars from FTX customers into risky trades at Alameda and unlawful purchases.
Read More: Peggy Fulford Carried Out $5.8 Million Fraud Of Sports Stars Including Dennis Rodman
Bankman-Fried's defense attorney, Mark Cohen, countered by presenting his client as an inexperienced but well-intentioned founder who didn’t have criminal intent.
Cohen described Bankman-Fried as a "math nerd" overwhelmed by his company's rapid growth.
He argued that any mismanagement resulted from this rapid expansion.
The trial, expected to last six weeks, will focus on the prosecution's case that Bankman-Fried used customer funds for various purposes.
It includes bankrolling expenses at Alameda, real estate acquisitions, and political donations.
Read More: French Fraudster Victor Lustig Sold The Eiffel Tower And Ripped Off Al Capone
If convicted, he could face a life sentence.
The prosecution's first witness, Marc-Antoine Julliard, said he initially believed in Bankman-Fried's sincerity and kept his deposits in FTX during the company's crisis, relying on reassuring tweets and messages.
However, he later regretted his decision as he could not withdraw his investments.
The second witness, Adam Yedidia, a former FTX employee and a close friend of Bankman-Fried, testified under an immunity order.
Yedidia claimed he resigned from FTX after learning that Alameda used FTX customer profits to pay creditors.
Looking to boost your online brand? Create your FREE business profile at WhatBiz? here.
Former staff to testify
Many of Bankman-Fried's former associates at FTX, who previously pleaded guilty to criminal charges and became prosecution witnesses, are expected to testify.
The star witness, Caroline Ellison, Bankman-Fried's on-and-off girlfriend and former head of Alameda, is expected to describe how she and Bankman-Fried allegedly siphoned money to Alameda.
Need Career Advice? Get employment skills advice at all levels of your career
His parents, Joseph Bankman and Barbara Fried, both professors at Stanford Law School, were seen at the courthouse.
They face their own legal troubles as FTX filed a civil lawsuit against them, alleging they accepted gifts and real estate from the company while their son was in charge.
Bankman-Fried will remain in jail throughout the trial after his bail was revoked in August due to alleged tampering with witnesses through media statements.
Follow us on YouTube, Twitter, LinkedIn, and Facebook.