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Prosecutors say Sam Bankman-Fried committed “massive fraud” and stole billions of dollars from “millions of customers” of his FTX cryptocurrency exchange. Opening arguments begin in the highly anticipated trial of a former cryptocurrency tycoon.
“A year ago, ‘SBF’ looked like it was on top of the world,” Assistant U.S. Attorney Thane Rehn told jurors in Manhattan federal court on Wednesday. “He has wealth, he has power, he has influence, but all of this… is based on lies.”
Lane said Bankman-Fried used the proceeds to buy luxury homes and recruit celebrities like Tom Brady and politicians like former Democratic President Bill Clinton.
Bankman-Fried’s attorneys are expected to make opening statements later Wednesday.
The prosecutor’s statement kicked off what is expected to be a six-week trial that will decide the fate of the 31-year-old former billionaire who until last year was one of the leading figures in the freewheeling world of cryptocurrency trading.
He is accused of defrauding investors, lenders and customers and absconding with billions of dollars in deposits entrusted to his FTX cryptocurrency exchange.
Bankman-Fried, who appeared in court in a gray suit, formally denied the charges and maintained his innocence in multiple media interviews before being jailed in August for allegedly trying to intimidate witnesses. Prosecutors confirmed Tuesday that they never offered Bankman-Fried a plea deal.
The defense team, led by attorney Mark Cohen, is expected to pin the blame on Bankman-Fried’s attorneys and advisers, claiming he acted in good faith in the complex and rapidly changing world of cryptocurrency regulation.
Prosecutors’ case hinges largely on the testimony of three core witnesses, Bankman-Fried’s former lieutenants who have agreed to cooperate with the government and are expected to testify in the coming days.
Several former FTX customers and investors are also expected to testify, possibly including a Ukrainian depositor at the exchange who believed the funds were in a safe haven during Russia’s full-scale invasion of the country.
The government’s list of potential witnesses or key figures in the trial, read in court, included all of FTX’s top in-house lawyers, as well as other key employees involved in lobbying Washington for exchange and technology development.
Venture capital firms that invested $1.8 billion in FTX before its collapse will also participate in the trial, including Sequoia Capital and partner Alfred Lin. SkyBridge Capital founder Anthony Scaramucci, who briefly served as a spokesman for Donald Trump’s administration before becoming a cryptocurrency evangelist, was also mentioned.
Arguments began after the 12-member jury and six alternates were selected from a pool of nearly 50 jurors. The judge asked potential jurors about their cryptocurrency experience and prior knowledge of the case. The selected jury consists of three men and nine women, including a social worker, a high school librarian and a retired corrections officer.
Judge Lewis Kaplan asked jurors if they watched Sunday’s interview with author Michael Lewis, whom he followed for months before and during Bankman-Fried’s fall from grace, a new book released Tuesday. Lewis, who said FTX has “a great real business,” told CBS News the book was intended to be “a letter to the jury.”
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