What to know about Sam Bankman-Fried’s trial after FTX collapsed

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The criminal trial of FTX founder Sam Bankman-Fried got underway in a Manhattan courthouse on Tuesday, as the onetime darling of cryptocurrency faces charges for orchestrating what prosecutors have described as “one of the biggest financial frauds in American history.”

The 31-year-old ran the cryptocurrency exchange FTX, once valued at $32 billion, until its high-profile collapse last November. Bankman-Fried was arrested in the Bahamas in December and charged with a slew of fraud and conspiracy charges. 

Here’s what to know about Bankman-Fried and the sprawling fraud case against him:

What charges does Bankman-Fried face?

Bankman-Fried faces charges for wire fraud, conspiracy to commit wire fraud, securities fraud and money laundering, and conspiracy to make unlawful political contributions and defraud the Federal Election Commission (FEC) in the trial beginning on Tuesday.

However, the FTX founder faces several more charges — including securities fraud, conspiracy to commit bank fraud and conspiracy to bribe foreign officials — in a second trial scheduled for March 2024.

Prosecutors accuse Bankman-Fried of siphoning off customer funds to prop up his cryptocurrency firm Alameda Research, as well as to bankroll tens of millions of dollars in campaign contributions.

Bankman-Fried was one of the largest political donors in the 2022 midterm elections. However, additional contributions using Alameda and FTX funds were made in the names of two other executives as part of a push to curry favor with candidates that could help pass favorable legislation, prosecutors allege.

They also accuse the FTX founder of making false and misleading statements to investors about the company’s financial condition and its relationship with Alameda. 

What do we know about the trial?

Bankman-Fried’s first criminal trial got underway on Tuesday with jury selection and is expected to last up to six weeks.

Four FTX executives who previously pleaded guilty to criminal charges related to the company’s collapse are expected to testify against Bankman-Fried at trial. 

Caroline Ellison, the former CEO of Alameda Research and Bankman-Fried’s ex-girlfriend, and Gary Wang, a co-founder of FTX, both pleaded guilty to fraud charges in December and agreed to cooperate with the investigation.

Nishad Singh, FTX’s former director of engineering, similarly pleaded guilty and agreed to cooperate with prosecutors in February, while fellow FTX executive Ryan Salame followed suit in early September.

Why was Bankman-Fried’s bail revoked?

The founder of the once-prominent crypto company was initially released on a $250 million bail and placed on home detention while awaiting trial. 

However, U.S. District Judge Lewis Kaplan rescinded Bankman-Fried’s bail and sent him back to jail in August, after finding there was probable cause to believe he tampered with witnesses at least twice following his arrest.

Prosecutors accused Bankman-Fried of harassing Ellison, his ex-girlfriend and the former CEO of Alameda Research, by sharing her personal writings with The New York Times and attempting to intimidate witnesses with his comments to the media and his attempt to contact one former FTX employee. 

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