Sam Bankman-Fried And His Alleged Fraud of at least $10 billion

Sam Bankman-Fried And His Fraud  of at least $10 billion
AP Photo/Mary Altaffer

Sam Bankman-Fried first spoke to the jury on Wednesday as the Manhattan federal fraud and money-laundering trial’s opening arguments got under way.

According to Assistant U.S. Attorney Nathan Rehn in his opening remarks, Bankman-Fried engaged in “a massive fraud,” stealing at least $10 billion from clients and investors to fund extracurricular activities including political donations and the acquisition of opulent real estate.

Since his arrest in the latter part of last year, Bankman-Fried, the co-founder of the collapsed cryptocurrency exchange FTX, has maintained his innocence. If the 31-year-old is found guilty of the accusations made against him, he may spend more than a century in prison.

Defense lawyers claim that when their client created his crypto enterprise, he had no intention of committing any crimes. Bankman-Fried has “a very different story” to tell than what the prosecution has presented, according to Mark Cohen, who is representing him.

The jury pool was reduced from 45 on the second day of the six-week trial to 12, plus six alternates, by counsel and Judge Lewis A. Kaplan before the start of the opening arguments at noon.

Four of Bankman-Fried’s closest allies have admitted guilt to fraud and other crimes, and three of them are scheduled to testify against him in return for reduced sentences, so he may have an uphill battle. This includes FTX co-founder Gary Wang and Caroline Ellison, a former coworker and Bankman-Fried’s ex-girlfriend.

Following the fall of FTX in November, Bankman-Fried was taken into custody.

Prior to FTX failing and declaring bankruptcy, Bankman-Fried had a $32 billion paper net worth. Known for mingling with politicians, Bankman-Friedman publicly declared he would assist in market rescue when smaller crypto businesses started collapsing in early 2022.

Judge Kaplan stated on Tuesday that potential jurors who were aware of FTX’s demise or who had suffered financial losses due to investing in cryptocurrencies would not be barred from serving as long as they were able to evaluate the case’s merits objectively.

One former federal prosecutor predicts that instead of diving too far into the complicated realm of cryptocurrency, prosecutors will concentrate on how Bankman-Fried used consumer money without their authorization.

“Prosecutors are going to say, ‘Look at where the money went and how it was spent,'” stated Michael Zweiback, co-founder of the law firm Zweiback, Fiset & Zalduendo. “This case is less about complicated investments and all about garden-variety fraud.”

Bankman-Fried, a son of Stanford University law school professors, attended MIT in the 2010s before beginning work at a Wall Street investment business in 2014. He left in 2017 to relocate to San Francisco, where in 2019 he assisted in founding FTX.

Credits: CBSNews

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