The 31-year-old-former billionaire’s trial kicked off yesterday, nearly a year after FTX collapsed in a meltdown that shocked financial markets and tarnished the budding entrepreneur and philanthropist’s reputation as an honest actor in a crypto sector pockmarked by scams and purported get-rich-quick schemes.
US district judge Lewis Kaplan chose a pool of nearly 50 qualified jurors, after dismissing dozens who could not serve for personal or professional reasons or would not be able to reach an impartial verdict. He said the parties would likely select the panel of 12 jurors and six alternates today.
That would pave the way for prosecutors and the defence to proceed to opening statements, in which each side would lay out their case.
Prosecutors with the US attorney’s office in Manhattan say Bankman-Fried used FTX customer’s money from the exchange’s 2019 launch until its November 2022 bankruptcy in order to prop up his hedge fund, Alameda Research, buy luxury real estate, and donate to US political campaigns.
They are expected to call three former members of Bankman-Fried’s inner circle – former Alameda chief executive Caroline Ellison and former FTX executives Nishad Singh and Gary Wang – to testify against him. All three have pleaded guilty and agreed to cooperate with prosecutors.
Bankman-Fried has pleaded not guilty and is likely to argue that while he failed to adequately manage risk, he did not steal money. His lawyers are likely to try to shift the blame for FTX’s dramatic failure to the cooperating witnesses, and argue that they are implicating Bankman-Fried in order to seek lenient sentences.
Once known for his casual attire and mop of unkempt curls, Bankman-Fried sported a trim haircut and wore a suit and tie to the first day of his trial.
He has been detained at the Metropolitan Detention Center in Brooklyn since Aug 11, when Kaplan jailed him for likely tampering with witnesses, including by sharing Ellison’s private writings with a reporter. Bankman-Fried and Ellison were at times romantic partners.