Sam Bankman-Fried, the co-founder and former chief government officer of collapsed cryptocurrency alternate FTX, is dealing with seven prices in a case introduced by the Division of Justice (DOJ) in relation to his operation of the alternate. Fees embrace wire fraud, securities fraud and conspiracy to commit cash laundering. As his first trial attracts nearer, listed below are a few of the key gamers within the case.
Bankman-Fried rose to fame as a crypto whiz child who at 29-years-old amassed a web value of US$26.5 billion in a matter of years. He studied physics at Massachusetts Institute of Expertise (MIT) however usually joked about being “absolute trash” in school. He then acquired his begin within the trade at Jane Road, a number one buying and selling agency, the place he executed arbitrage trades on exchange-traded funds (ETFs). Parlaying these buying and selling abilities into the crypto world, he launched Alameda Analysis, a crypto hedge fund, which capitalized on a Bitcoin arbitrage commerce between the U.S. and Japan.
Then got here FTX, a crypto alternate constructed by Bankman-Fried alongside Nishad Singh and Gary Wang that aimed to rival the “s-–present exchanges” Alameda traded on. By late 2021, FTX ranked because the second main alternate in crypto derivatives after its competitor Binance and had secured a valuation of US$32 billion. The alternate had the backing of a few of the enterprise trade’s most venerable gamers together with Sequoia, Lightspeed and BlackRock.
Because the crypto bear market took maintain, a report from Coindesk revealed that Alameda Analysis’s stability sheet contained a big proportion of illiquid property, predominantly in FTX’s native token FTT. In response Binance mentioned it will liquidate its FTT holdings, sparking a financial institution run that revealed a shortfall in over US$8 billion in buyer funds on FTX and in the end led to the alternate submitting for chapter.
Reviews from FTX’s liquidators, regulators and the DOJ allege the alternate considerably lacked company controls and oversight. Bankman-Fried has pleaded not responsible to all prices.
Choose Lewis A. Kaplan
Overseeing the felony case towards Bankman-Fried is U.S. District Choose Lewis Kaplan. The 78-year-old decide beforehand labored as a companion at legislation agency Paul Weiss in New York earlier than being nominated to a Federal judicial place in New York by U.S. President Invoice Clinton in 1994. He then secured senior standing on the bench in 2011.
Kaplan has preceded over many high-profile instances within the U.S. District Court docket for the Southern District of New York together with a civil lawsuit filed by Virginia Giuffrie towards the U.Ok.’s Prince Andrew claiming he sexually assaulted her on three separate events. Andrew tried to dismiss the case, having beforehand reached a settlement with Giuffrie in 2009, nevertheless Kaplan denied the request. The case was settled exterior of court docket with Andrew paying an undisclosed sum to Giuffrie.
He additionally presided over the current civil case introduced by author E. Jean Carroll towards former U.S. President Donald Trump, which accused Trump of raping her in a dressing room in a division retailer within the early 90s. Jurors awarded Carroll US$5 million, discovering that she was sexually abused, however rejecting the allegation she was raped. He’s additionally presiding over a second trial that can decide how a lot Carroll is owed in relation to defamatory claims made by Trump.
- The prosecution
Prosecuting Bankman-Fried on behalf of america is the U.S. Lawyer’s Workplace for the Southern District of New York. The workplace represents the pursuits of the U.S. authorities in felony and civil issues.
U.S. Lawyer Damian Williams is the lead lawyer for the workplace and was nominated by U.S. President Biden in August 2021. In his earlier position as assistant U.S. lawyer, Williams primarily investigated and prosecuted instances involving corruption in monetary markets and politics, in line with the company’s web site.
Co-leading the prosecution towards Bankman-Fried for the company is Assistant U.S. Attorneys Nicolas Roos and Danielle Sassoon. Roos has labored on the U.S. lawyer’s workplace for over seven years, in line with LinkedIn. Sassoon beforehand labored as a litigation lawyer at Kirkland and Ellis and was an adjunct professor at New York College’s legislation college earlier than becoming a member of the workplace.
Bankman-Fried is represented by attorneys from the legislation agency Cohen and Gresser. Companions Mark Cohen and Christian Everdell are co-leading the protection. Cohen co-founded Cohen and Gresser and headed up the agency’s litigation and arbitration group in addition to the white collar protection and regulation group. Earlier than co-founding the agency he served as an assistant U.S. lawyer for the Jap District of New York.
Everdell additionally labored within the U.S. Lawyer’s workplace however for the Southern District of New York earlier than becoming a member of Cohen and Gresser. He now leads Cohen and Gresser’s U.S. Privateness & Knowledge Safety group and can also be a member of the agency’s litigation and arbitration group and white collar protection and regulation group.
The pair just lately represented Ghislaine Maxwell in a high-profile felony case the place she was convicted of intercourse trafficking offenses associated to recruiting underage ladies for the billionaire financier and intercourse offender Jeffrey Epstein. She was sentenced to twenty years and fined $750,000.
Court docket filings present that for the Bankman-Fried case, the protection is trying to, at the very least partially, use an “recommendation of counsel” technique. Underneath this protection, Bankman-Fried will declare he was “performing in good religion” when it got here to alleged conduct equivalent to loaning funds to executives and setting messages to auto-delete as a result of he was following the recommendation of in-house attorneys in addition to exterior legislation agency Fenwick and West.
The prosecution intends to attract on testimonies from Bankman-Fried’s closest advisers, skilled witnesses and former FTX staff, lenders and traders, in line with a court docket submitting. FTX co-founders Gary Wang and Nishad Singh in addition to former Alameda Analysis CEO Caroline Ellison have all pleaded responsible to felony prices and are cooperating with investigators. They’re anticipated to testify at trial.
FTX Digital Markets Co-CEO Ryan Salame just lately pleaded responsible to felony prices linked to marketing campaign financing and conspiracy to function an unlicensed cash transmitting enterprise. In line with the New York Occasions, federal prosecutors have acknowledged that Salame isn’t cooperating with them within the case towards Bankman-Fried. He had a detailed relationship with Bankman-Fried and Enterprise Insider described him as an individual he was “immediately very impressed with.”
Bankman-Fried’s father Joseph Bankman might make an look on the trial. He beforehand labored in a part-time position at FTX and reportedly helped arrange conferences for his son in Washington D.C. The alternate is presently making an attempt to claw again an unlawful US$10 million mortgage made to Bankman-Fried’s father, which liquidators imagine has been used to bankroll his son’s authorized protection. Bankman additionally retained his personal attorneys, in line with a report from Reuters.
Each Bankman-Fried’s father and mom, who’re professors at Stanford College, have stood by him because the case has unfolded. They co-signed Bankman-Fried’s US$250 million bond in a bail bundle and up till just lately he was below home arrest at his dad or mum’s dwelling.
Bankman-Fried’s authorized workforce had till Sept. 1 to request a trial extension in relation to complaints over unsuitable situations in jail for the preparation of his protection. The decide set this time-frame as a result of a jury for the trial wanted to be requested by Sep.7.
Within the jury selection course of, a bunch of potential jurors will obtain a web-based questionnaire to fill out after which, in a course of generally known as voir dire, those that are summoned will face extra questions from the decide and the attorneys to find out their suitability for jury obligation.
On Sept. 11 each the protection and the prosecution filed their questions for potential jurors together with questions relating to data of Sam Bankman-Fried, FTX, cryptocurrencies, political donations, efficient altruism — which is a charitable philosophy Bankman-Fried adopted — and ADHD, a medical situation that Bankman-Fried takes treatment for.
One of many challenges of this case is its high-profile nature. The prosecution and protection might face challenges discovering jurors who’re unfamiliar with Bankman-Fried, just like the federal government’s case towards startup founder Elizabeth Holmes.