The 31-year-old is accused of orchestrating one of the biggest frauds in U.S. history by illegally diverting billions of dollars from client accounts for his personal use, which included making risky trades at his cryptocurrency hedge fund. He’s also accused of making illegal donations to lawmakers on Capitol Hill and their affiliated political action committees as part of a plan to buy power and influence regulation.
His lawyers have painted him as less of a mastermind and more of an inexperienced kid who got caught up in the largely unregulated world of crypto.
Bankman-Fried, an MIT graduate, was sharing a penthouse in the Bahamas with his friends and onetime girlfriend Caroline Ellison when his glamorous life came crashing down last year. Most of his close “friends,” including Ellison, were top-ranking lieutenants in his businesses. Four have already pleaded guilty, and three are expected to testify against him. Ellison is scheduled to take the stand Tuesday.
Bankman-Fried has pleaded not guilty to seven charges, including wire fraud, money laundering, and multiple conspiracy counts in what has been described as the largest corporate collapse in decades. If he’s found guilty, he could be facing a 100-plus-year sentence.
Here’s a look at what happened this week:
Twelve jurors and six alternates were picked from a pool of 45 and seated on Wednesday.
The nine women and three men range in age from 33 to 69 years old. The group includes a 50-year-old Metro-North train conductor and mother of five; a 47-year-old high school librarian who lives with her cats and sick mother; a 61-year-old male postal worker; a 40-year-old unemployed social worker; and a 43-year-old Ukrainian woman who does IT and has been in the United States for 15 years.
The trial is expected to wrap up before Thanksgiving.
Opening arguments began Wednesday with both sides presenting very different pictures of Bankman-Fried and giving glimpses of their game plan for the trial.
Federal prosecutors told jurors Bankman-Fried siphoned billions of dollars from unsuspecting customers to fund a lavish lifestyle and buy himself “power and influence” on Capitol Hill and then lied to cover his tracks.
The defense claimed he was simply a “math nerd” who made mistakes, acted “in good faith,” and shouldn’t be held accountable. They added that it wasn’t a crime “to be the CEO of a company that needs to fold for bankruptcy.” They also hinted that other people should be held accountable for FTX’s fall, including Ellison.
Wang and Bankman-Fried were friends first before becoming colleagues. The two met at math camp when they were in high school and would later go on to be college roommates.
Wang testified Thursday and Friday against his former friend for six hours.
He told jurors that Bankman-Fried was the final decision maker at the exchange and personally directed the misuse of millions of dollars from customer accounts. He also said Bankman-Fried was acutely aware that he lied about FTX customer assets being safe in tweets he blasted out last November that have since been deleted.
Wang, one of three FTX co-founders, created the software that allowed the diversion of funds between FTX and Alameda Research, a cryptocurrency firm, to take place.
“He asked us to do it, and we told him we did it,” Wang testified.
At his plea hearing in December 2022, the chief coder pleaded guilty to wire fraud and three conspiracy counts of wire and securities fraud. He’s also facing civil fraud charges from the Securities and Exchange Commission and Commodity Futures Trading Commission.
Following the hearing, lawyer Ilan Graff said his client has “accepted responsibility for his actions and takes seriously his obligations as a cooperating witness.”
Bankman-Fried’s parents, Stanford Law School professors Barbara Fried and Joe Bankman, have shown up to court to support their son, but they’re in hot water as well.
Fried and Bankman are being sued by FTX, the bankrupt crypto exchange their son founded, and are accused of getting rich at the expense of unknowing customers.
FTX, which is now being run by turnaround specialist John Ray, went after the founder’s parents, claiming the company was a “family business.” Lawyers have been trying to claw back millions of dollars in cash and assets, including Bankman-Fried’s $16.4 million Caribbean penthouse and two jets he owned.
The couple were included on a list of potential witnesses who may testify at Bankman-Fried’s trial.
They have denied any wrongdoing.