NEW YORK (AP) — Jury selection begins Tuesday in New York for the criminal trial of Sam Bankman-Fried, a tech wunderkind who once promoted his FTX digital coin exchange as a safe way for regular people to get into cryptocurrency. The 31-year-old crypto mogul, once a billionaire, faces the possibility of a long prison term due to allegations that he defrauded thousands of customers.
U.S. Attorney Damian Williams, who is overseeing the prosecution, has called it one of the biggest frauds in the country’s history. Prosecutors allege Bankman-Fried illegally diverted massive sums of customer money for his personal use, including making risky trades at his cryptocurrency hedge fund, Alameda Research. He is also accused of using customer money to buy real estate and make big political contributions as he attempted to influence government regulation of cryptocurrency.
In interviews and social media posts, Bankman-Fried has acknowledged making huge mistakes while running FTX, but insists he had no criminal intent. He has blamed FTX’s collapse last November, in something equivalent to an old-fashioned bank run, on vindictive competitors, his own inattentiveness and fellow executives who he said failed to manage risk properly.
As recently as early last fall, Bankman-Fried was still portraying himself as a stabilizing force in the cryptocurrency industry. He spent millions of dollars on Super Bowl advertisements that promoted FTX as the “safest and easiest way to buy and sell crypto” and “the most trusted way to buy and sell” digital assets. Comedian Larry David, along with other celebrities such as football star Tom Brady and basketball star Stephen Curry, have been named in a lawsuit that argued their celebrity status made them culpable for promoting the firm’s failed business model.
Bankman-Fried is charged with wire fraud and conspiracy. He agreed to be extradited to the United States after his arrest in the Bahamas last December. After being initially freed on a $250 million personal recognizance bond, Bankman-Fried was confined to his parents’ home in Palo Alto, California, until Judge Lewis A. Kaplan ordered him jailed last month. His lawyers have appealed the detention order but the 2nd U.S. Circuit Court of Appeals rejected the appeal. The trial is expected to end before Thanksgiving.
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