Sam Bankman-Fried faced a jury for the first time on Wednesday as his trial on federal fraud and money-laundering charges began in Manhattan. Opening arguments were presented, with Assistant U.S. Attorney Nathan Rehn alleging that Bankman-Fried committed “a massive fraud” by diverting at least $10 billion from customers and investors for personal use, including political donations and luxury real estate purchases.
Bankman-Fried, the co-founder of failed cryptocurrency exchange FTX, has maintained his innocence since his arrest last year. If convicted, the 31-year-old could face a prison sentence of over a century.
In his opening statement, Bankman-Fried’s defense attorney, Mark Cohen, argued that his client had no criminal intentions while building his cryptocurrency empire. Cohen described Bankman-Fried as a “math nerd who didn’t drink or party,” and stated that he did not defraud anyone.
The trial, expected to last six weeks, saw the selection of a jury of 12 with six alternates. Bankman-Fried’s defense may face challenges as four of his close associates have pleaded guilty to fraud charges and are expected to testify against him. These include his former girlfriend and FTX co-founder.
Before FTX collapsed and filed for bankruptcy, Bankman-Fried’s net worth was estimated at $32 billion. He had gained attention for his association with politicians and public statements regarding rescuing the cryptocurrency market.
The prosecution is likely to focus on Bankman-Fried’s unauthorized use of customer funds, rather than delving into the complexities of cryptocurrencies, according to former federal prosecutor Michael Zweiback. He described the case as centered around “garden-variety fraud” rather than complicated investments.
Bankman-Fried, the son of Stanford University law school professors, studied at the Massachusetts Institute of Technology before entering the financial industry. He played a key role in starting FTX in 2019.
—The Associated Press contributed to this report.
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