New York (AFP) – The trial against Sam Bankman-Fried, the former president of FTX, one of the largest cryptocurrency platforms in the world that is now bankrupt, begins this Tuesday, October 3, to determine whether he committed massive fraud against more than a million clients.
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The 31-year-old, once one of the most respected figures in the crypto world, potentially faces decades in prison.
The first day of the process will be dedicated to selecting the jury for a case that will take about six weeks to resolve in court.
In just a few years, the Massachusetts Institute of Technology (MIT) graduate turned his FTX platform into the second largest cryptocurrency exchange in the world, amassing a gigantic fortune in the process.
FTX pursued an aggressive marketing campaign associating itself with the names of stars such as Brazilian supermodel Gisele Bundchen or American basketball star Stephen Curry.
Bankman-Fried also saved other companies in the industry when they faced difficulties.
At the peak of his career, ‘SBK’, as he is known, had an estimated fortune of $26 billion.
But his empire began to crack last November when a press report denounced business relations between FTX and Alameda Research, the company’s cryptocurrency investment arm.
Sam Bankman-Fried, founder of cryptocurrency platform FTX, is accused of fraud
The allegations alleged that the funds of some FTX clients were used, without their knowledge, to finance Alameda and make risky investments.
Panic was generated immediately. Individual investors and business partners rushed to recover their money, to the point that FTX collapsed and declared bankruptcy.
When the dust settled, about $8.7 billion was missing, according to the administrator who handled the liquidation.
The signs
Manhattan federal prosecutor Damian Williams accused him of diverting funds from FTX clients and injecting them into Alameda, as well as purchasing real estate in the Bahamas for several hundred million dollars and making donations to political candidates in the United States.
Danielle Sassoon, a member of prosecutor Williams’ team, testified at a hearing that the number of victims of Sam Bankman-Fried’s alleged actions could be “in excess of a million.”
Accused of fraud and criminal conspiracy, ‘SBF’ was extradited in late December from the Bahamas, where FTX was headquartered, and was released on bail of $250 million upon his arrival in New York.
However, in early August he was arrested again by federal judge Lewis Kaplan for attempted witness tampering.
According to the prosecutor, Bankman-Fried passed documents to the American newspaper ‘The New York Times’ in an attempt to influence the testimony of Caroline Ellison, his ex-girlfriend and former Alameda executive.
Ellison has been charged in this case and has agreed to cooperate with US authorities, as have three other former executives of the group.
‘SBF’ has admitted management errors but no irregularities, and has accused Ellison of irregularities.
“I never tried to commit fraud. I’m shocked by what happened this month,” a sad Bankman-Fried said in an interview days after his company collapsed.
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