The upcoming trial of Sam Bankman-Fried, the former head of FTX, is set to begin in New York City. Bankman-Fried, once considered a leader in digital currencies, is facing charges of wire fraud, securities fraud, and money laundering. These charges stem from allegations that he defrauded customers of his digital currency exchange, FTX, and lenders to his cryptocurrency hedge fund, Alameda Research. Bankman-Fried has pleaded not guilty to all charges, but if convicted, he could face up to 20 years in prison.
Bankman-Fried co-founded Alameda Research in 2017 and FTX in 2019, quickly becoming a major player in the crypto market. FTX’s valuation soared, and Bankman-Fried’s personal wealth was estimated to be $26 billion at its peak. He gained prominence as a political donor and called for some regulation of the industry. However, his empire began to crumble when it was revealed that much of Alameda Research’s balance sheet was composed of FTT tokens issued by FTX. The value of these tokens plummeted after a competitor announced they would sell off all their FTT holdings, causing digital currency traders to withdraw their funds from FTX. Both FTX and Alameda Research filed for bankruptcy, and Bankman-Fried was replaced as CEO.
Throughout the ordeal, Bankman-Fried maintained a public image, often addressing the situation via interviews and social media. However, he was arrested in the Bahamas and extradited to the US after being accused of leaking diary entries to the media. He has since been jailed, and his trial is expected to last about six weeks. Bankman-Fried is also facing additional charges, including bribery of a foreign official, and is scheduled to be tried in March 2024.