Prosecutors Allege Crypto Fraud in Trial of Sam Bankman-Fried’s Crypto Empire

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At the center of Sam Bankman-Fried’s trial is a dispute between two contrasting narratives; while prosecutors accuse the former crypto mogul of orchestrating a $10 billion dollar conspiracy to use customer deposits for personal gain, his lawyer insists he acted “in good faith” to make his firm successful with no intention to deceive.

This is the highest-profile reckoning for a business executive since Elizabeth Holmes’ fraud conviction in early 2020. Bankman-Fried became a billionaire virtually overnight, only to see his company collapse and his fortune evaporate. He has pleaded not guilty to seven counts of fraud and money laundering, and if convicted could face a life sentence.

At the trial, prosecutors point to Bankman-Fried’s X posts and commercials, which they allege were intended to deceive customers. On the other hand, defense lawyer Mark Cohen cast his client as a “math nerd who didn’t drink or party,” and argued that he acted in customers’ interests and made decisions he thought were right when he made them.

The trial has become a closely watched referendum on the reckless behavior across the cryptocurrency industry, where a frenzy over digital coins led to billions of dollars in losses. Three of Bankman-Fried’s top executives have pleaded guilty to fraud and agreed to cooperate against him, including his on-and-off girlfriend, Caroline Ellison, who ran the hedge fund he founded.

Witnesses called to the stand included Marc-Antoine Julliard, an investor who lost more than $100,000 in cash and Bitcoin in FTX’s collapse, and Adam Yedidia, a college friend of Bankman-Fried’s who worked at Alameda and FTX and quit shortly before the company went bankrupt.

The jury of nine women and three men was sworn in, with two prospective jurors excused due to their personal financial losses in the crypto market. A third candidate who didn’t understand cryptocurrencies was also excused, and likened the concept to the Bernard Madoff Ponzi scheme.

The prosecution and defense have not held any negotiations over a plea agreement, and no deal has been offered to Bankman-Fried. The trial continues.

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