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    5. Crypto wunderkind will 'blame the lawyers' in fraud trial of ..


    Crypto wunderkind will 'blame the lawyers' in fraud trial of the century

    Sam Bankman-Fried's bail was revoked after a US judge found it likely he tried to interfere with key witnesses on at least two occasions. Photo: Stephanie Keith/Bloomberg

    “I’d like to start with a sworn statement: I screwed up,” Sam Bankman-Fried wrote days after the collapse of FTX, the $36 billion cryptocurrency exchange he founded. .

    The entrepreneur holed up in a $30 million penthouse in the Bahamas, preparing a statement justifying his actions to US politicians.

    A few hours before giving evidence, Bankman-Fried was arrested by Bahamian police. Since then, he's had time – at home and, most recently, in a jail cell after his bail was revoked due to charges of witness tampering – to hone his line of defense.

    In a Manhattan courtroom next week, 11 months after the collapse of his digital currency empire, the 31-year-old former billionaire will face the cryptocurrency trial of the century.

    Bankman-Fried is indicted by the US government on seven counts of criminal mischief. conspiracy, fraud and money laundering on FTX, once the world's second largest digital coin exchange.

    Prosecutors allege he misappropriated billions of dollars in FTX client funds to fund risky bets at a cryptocurrency hedge fund called Alameda, leaving an $8 billion black hole and causing the company's bankruptcy.

    The trial is expected to last six weeks, and he denies wrongdoing.

    Former colleagues, roommates and ex-girlfriend Caroline Ellison are expected to testify or provide evidence. Four former FTX executives, including Ellison, who headed Alameda, have already pleaded guilty to separate fraud charges.

    Bankman-Fried The US government charges him with seven counts of conspiracy. Photo: REUTERS/Jane Rosenberg

    Bankman-Fried says he made mistakes but never intended to commit any wrongdoing.

    The trial will be closely watched by FTX's million creditors. Louise Abbott, a partner at Keystone Law, which represents claimants in select insolvency proceedings, says: “Creditors want to see justice done.”

    Starting Tuesday, Bankman-Fried's defense will be weighed against millions of pages of evidence, personal communications and audio recordings collected by the U.S. government.

    According to legal documents filed before the trial, Bankman-Fried's lawyers will argue that he simply did what he did. what he was told was legal – the so-called “counsel's advice” of the defense – or blame the lawyers.

    FTX collapsed in November last year, days after billions were discovered missing from its accounts. John Ray, a bankruptcy expert who later took control of the business, called its corporate systems a “dumpster fire.”

    1511 FTT in US dollars

    US prosecutors say it all stemmed from a failed Bankman-Fried money-making scheme. FTX secretly inflated the value of a cryptocurrency token it controlled called FTT, which made up the majority of its assets, while using customer deposits to help Alameda borrow billions of dollars to finance deals—in violation of its own terms.

    After a massive sell-off by FTT, the scheme fell apart.

    Prosecutors say Bankman-Fried masterminded the plans and used “billions of dollars in stolen funds” to buy up luxury properties. and donate to political campaigns.

    Sam Bankman-Fried is accused of using stolen client funds to buy luxury real estate, including a penthouse in the Bahamas. Photo: PLANET PHOTOS

    Bankman-Fried has pleaded not guilty. In a letter submitted to the court, Mark Cohen, Bankman-Fried's lawyer, claims that FTX's legal advisers, which included Silicon Valley law firm Fenwick & West “gave him assurances that he was acting in good faith” when he used apps that automatically deleted FTX records and issued huge loans to company executives.

    The letter names three other FTX lawyers who were involved in the “approval” of the decision.” Meanwhile, Bankman-Fried publicly criticized another law firm used by FTX, Sullivan & Cromwell for allegedly forcing him to declare bankruptcy. In the bankruptcy case of Sullivan & Cromwell called Bankman-Freed's claims “false.”

    Fenwick & West declined to comment. Sullivan & Cromwell did not respond to requests for comment.

    Martin Auerbach, head of the white collar and investigations practice at law firm Withersworldwide in New York, says Bankman-Fried will likely try to show that he “surrounded himself with the best and the brightest and paid them a lot of money” to advise him about the legality of his actions.

    Typically, this also requires that the defendant provide evidence that he has provided his lawyers with the information they need. give good advice.

    Bankman-Fried's lawyers told the court that the advice he received from legal advisers was “relevant to rebutting” the government's argument that he acted with criminal intent.

    Days after FTX's bankruptcy, Ellison, The head of Bankman-Fried's, a supposedly separate crypto hedge fund, has signed a plea agreement.

    In July, the New York Times published excerpts from her personal diaries, which a judge said were likely released by Bankman-Fried to “scare” her.

    After Bankman's leak -Frida was returned to prison and his $250 million bail was revoked. Since then, the former crypto prodigy has been waiting behind bars for his trial.

    For the prosecution, evidence related to Ellison could be critical to proving “criminal conspiracy,” according to court filings. A few days before FTX's bankruptcy, Ellison addressed employees.

    When asked who authorized taking money from FTX clients to finance his high-risk hedge fund, Ellison replied: “Um… Sam, I think.”

    < p>If convicted, Bankman-Fried will be sentenced to 115 years in prison.

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