Crypto Tycoon SBF of FTX faces trial in New York

By Staff Writer 

Sam Bankman-Fried (SBF), now disgraced crypto tycoon of the collapsed FTX cryptocurrency exchange, was set to stand trial Tuesday (03) in New York for orchestrating a massive scheme to steal billions of dollars from FTX customer money. 

FTX was one of the largest cryptocurrency exchanges. According to the New York Times FTX enabled customers to trade digital currencies for other digital currencies or traditional money. It also had its own cryptocurrency known as FTT. It was based in the Bahamas, built its business on ‘risky trading options that are not legal in the United States’. A 30 year old Massachusetts Institute of Technology graduate, SBF was the founder and Chief Executive of the company. Having more than a million customers. SBF ‘s empire was believed to be worth $32 billion.

Since last November, SBF was under investigation by federal prosecutors and the United States Securities Exchange Commission (SEC),  before he was extradited from the Bahamas in early January.

Federal prosecutors have charged him with orchestrating a scheme to siphon billions of dollars into political contributions, real estate purchases, charitable donations, and venture investments. Bankman-Fried is also accused of lying to his venture capital backers and the companies that lent FTX money. The scheme was exposed in November when a run on deposits forced FTX to shut down withdrawals, leaving over $8 billion in customer funds missing.

Federal prosecutors later charged SBF wth eight counts, including wire fraud, securities fraud, commodities fraud, money laundering, and campaign finance violations. However, the campaign finance charge was dropped, leaving Bankman-Fried with only seven counts. Additional charges, including bank fraud and bribery of a foreign government, have been postponed to a possible second trial in March.

Bankman-Fried oversaw two core businesses: FTX and a hedge fund called Alameda Research. FTX served as a marketplace for people to buy and sell digital currencies, allowing users to deposit and spend money on Bitcoin, Ether, or other newfangled coins. He has also blamed his Alameda colleagues for failing to institute proper risk management protocols and plans to argue that two large law firms authorized most of his actions at FTX.

If found guilty, SBF could face up to 115 years in prison.

[Photo courtesy of Reuters]