The trial of Sam Bankman-Fried, the 31-year-old founder of crypto exchange FTX and Alameda Research trading firm, has been underway in a Manhattan court, with the former CEO facing seven criminal charges for alleged fraud and conspiracy. Billions of dollars of customer funds were lost after the price of crypto dipped and FTX collapsed in 2022.
Bankman-Fried has pled not guilty. His attorney, Mark Cohen, argued during opening statements on Wednesday that the founder never intended to defraud anyone or mislead customers to get them to invest in FTX. Rather, he argued, it was simply an unlucky outcome of investing in a volatile cryptocurrency market.
In the lead-up to FTX’s downfall last November, the crypto exchange’s valuation peaked at $32 billion while the price of some of the world’s largest tokens such as Bitcoin and Ether were in freefall. For the first time since 2021, the crypto market overall was worth less than $1 trillion by June 2022.
Prosecutors, on the other hand, argued that Bankman-Fried built his crypto empire on lies and used customer funds to funnel it to other investments without letting them know.
Several crypto executives and leaders have weighed in, believing that the problem lies in what they might characterize as fraudulent players like Bankman-Fried, not the digital currency itself. Sheila Warren, CEO of the Crypto Council for Innovation lobbying group, said: “Sam should get convicted because he’s a criminal. The industry supports that because a lot of people felt burned by him.”
Qiao Wang, founder of Alliance, an accelerator for crypto start-ups, added that people like Bankman-Fried have caused others to sour on the crypto world. “It hurts the industry,” he said. “I can’t wait to see Sam get punished.”