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Sam Bankman-Fried committed “massive fraud” by stealing “billions of dollars from millions of customers” of his FTX cryptocurrency exchange, prosecutors have alleged, opening arguments in the former crypto magnate’s hotly anticipated trial began.
“A year ago, ‘SBF’ looked like he was on top of the world,” Assistant U.S. Attorney Thane Rehn told jurors in Manhattan federal court Wednesday. “He had wealth, he had power, he had influence, but everything . . . was built on a lie.”
Bankman-Fried used the proceeds to buy luxury homes and court celebrities such as Tom Brady and politicians, including former Democratic President Bill Clinton, Wren said.
Bankman-Fried’s attorneys are expected to respond later Wednesday with their opening arguments.
Prosecutors’ statements are expected to be a six-week trial to determine the fate of the 31-year-old former billionaire, who until last year was one of the leading figures in the freewheeling world of cryptocurrency trading.
He was accused of defrauding investors, lenders and customers after he deposited billions of dollars entrusted to his FTX cryptocurrency exchange.
Bankman-Fried, who sat in court wearing a gray suit, has steadfastly denied the charges and maintained his innocence in several media interviews before being jailed in August on charges of attempting to intimidate witnesses. Prosecutors confirmed Tuesday that they had not offered Bankman-Fried a plea deal at any time.
His defense team, led by lawyer Mark Cohen, is expected to shift the blame to Bankman-Fried’s lawyers and advisers, who say he acted in good faith in the complex and rapidly changing world of crypto regulation.
Prosecutors’ case rested heavily on the testimony of former lieutenants of the bank who have agreed to cooperate with the government and three federal witnesses who are expected to take the stand in the coming days.
Several former FTX clients and investors are expected to testify, including a Ukrainian depositor at the exchange who believed funds were in a safe haven during a full-scale invasion by Russia.
A list of prospective witnesses or key figures at the hearing read by the government in court includes FTX’s top in-house lawyers and other federal employees involved in lobbying for the exchange and technology development in Washington.
Venture capital investors, including Sequoia Capital and partner Alfred Lin, who invested $1.8bn before FTX’s collapse, will be involved in the trial. Skybridge Capital founder Anthony Scaramucci – who was briefly a spokesman for Donald Trump’s administration before becoming a crypto evangelist.
Arguments began after a panel of 12 members and six alternates was selected from a panel of about 50 members. The judges questioned prospective jurors about their experiences with cryptocurrencies and the case. The selected jury consisted of three men and nine women, including a social worker, a high school librarian and a retired corrections officer.
Judge Louis Kaplan asked jurors if they had seen an interview Sunday with author Michael Lewis, who shadowed Bankman-Fried during her downfall months ago and for her latest book, published Tuesday. Lewis, who said FTX is “a big real business,” told CBS News that the book is “kind of a letter to the jury.”