What To Expect At Sam Bankman-Fried's Trial Starting Next Week
Sam Bankman-Fried, the former CEO of the failed cryptocurrency exchange FTX, will go on trial next week in the Southern District of New York, facing seven charges of fraud and conspiracy.
Less than a year ago, Bankman-Fried was the darling of the crypto industry.
While Bankman-Fried was at the helm of FTX, the company allegedly cut marketing deals with the likes of football legend Tom Brady and comedian Larry David. Additionally, regulators said Bankman-Fried and a number of other FTX executives were generous political donors.
Cracks in FTX began to appear in early November 2022, when CoinDesk published a report regarding the balance sheet of Alameda Research, which was a trading firm closely associated with FTX and co-founded by Bankman-Fried.The report revealed extremely heavy exposure to FTT, which was the proprietary token of FTX.
After the CoinDesk report was released, some FTT holders became spooked, specifically FTX competitor and Binance CEO Changpeng Zhao.
Eventually, many FTT holders dumped their holdings and the price of the token fell sharply by more than 80%. The concerns over Alameda Research's books eventually also bled over to FTX, and many customers began making large withdrawals. Not long after, FTX was forced to pause withdrawals and file for bankruptcy, as they were effectively insolvent.
According to the U.S. Department of Justice, FTX was unable to process withdrawals due to mismanagement, including a commingling of funds between the crypto exchange and Alameda Research.
As a result, Bankman-Fried was placed under house arrest in December 2022. However, the former FTX CEO was eventually sent to jail in August 2023 on additional allegations of tampering with witnesses.
Next week's trial is one
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