SBF’s trial promises to be just as riveting as the rest of the FTX drama
‘The odds seem to be stacked against him at this point’
All eyes are on Sam Bankman-Fried this week as the former CEO of crypto exchange FTX goes on trial in one of the biggest financial fraud cases of this decade on Tuesday. And it figures: This is set to be one of those cases that’s going to inspire a bunch of documentaries and books (there’s one already), since crypto is so new, there was so much drama around Bankman-Fried and his former colleagues, there’s the sheer scale of the alleged fraud, and the massive amounts of money involved.
Still, there’s a lot of speculation about what the case could look like. So to get to the meat of the matter, we spoke to a handful of legal experts on what to expect.
Here’s what we know: Bankman-Fried will go on trial for seven counts of alleged fraud and conspiracy over a six-week period, and if sentenced, he could spend the rest of his life in prison. It’s a financial crimes case, and there will be a lot of boring documentation involved, but we can also expect some spicy drama given that a lot of Bankman-Fried’s former colleagues have already pleaded guilty and may be testifying against him.
Some lawyers think the case could drag on for much longer than the six weeks, though. (There’s a separate trial scheduled in March 2024 for charges related to political corruption and money laundering.)
“Crypto is so complicated and so new, the prosecution will have to devote a lot of time just to explain what distinguishes it from ordinary stocks and bonds,” Anthony Sabino, professor of law at the Peter J. Tobin College of Business at St. John’s University, told TechCrunch+.
And then there’s the $8 billion that Bankman-Fried is alleged to have scammed from customers. “In one sense, this is your Enron, your Bernie Madoff, that once-in-a-decade sort of trial,” Christopher LaVigne, a partner in the litigation team at law firm Withers, said. “It’s a big deal and just trying to get a sense of the amount of money that was lost and that is currently being spent trying to chase it around. It’s going to go on for a long time to come, just like Bernie Madoff’s bankruptcy [trial] went on forever.”
But it’s a financial crimes case, so there’s also going to be a lot of slower parts where the lawyers and experts get into the nitty-gritty. “There’s going to be the phase of the trial where they have to introduce the transactional evidence, and that’s when jurors fall asleep and it’s just boring. It’s a document case,” LaVigne said. Still, it’s a routine and redundant part of the proceedings and has to be done to make a case on both sides.
According to Christine Adams, a former federal prosecutor who’s currently a partner at law firm Adams, Duerk & Kamenstein, this is essentially a combination of the Elizabeth Holmes Theranos case and the Bernie Madoff case: Both those cases had a seemingly genius founder/mastermind behind a complex and allegedly successful business that eventually turned out to be something much less concrete and legal.
The testimonies of Bankman-Fried’s former colleagues and staffers who entered into plea deals with the government are bound to be exciting, Sabino feels. And a lot of people are anticipating the testimonies of those currently overseeing FTX’s bankruptcy, who will explain what they found upon assuming custody of the firm, its assets, and its records.