The fraud trial of former FTX CEO SBF will begin on October 3rd.

Former FTX CEO SBF's fraud trial starts on October 3rd.

Author: Katherine Ross, blockworks Translator: Shanolba, LianGuai

The fraud trial of former FTX CEO SBF is set to begin on October 3rd, when jury selection will take place. This six-week trial comes less than a year after FTX’s collapse.

Charges and Background

Bankman-Fried is charged with fraud and conspiracy in relation to FTX, which has since gone bankrupt. US federal prosecutor Damian Williams has called his alleged crimes “one of the largest financial frauds in American history.”

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Bail Issues

In August, a judge revoked Bankman-Fried’s bail at the request of the prosecutor. The petition mentioned Bankman-Fried’s contact with a New York Times reporter, which was seen as a key factor. Bankman-Fried is accused of leaking diary entries of former colleague and ex-girlfriend Caroline Ellison to the reporter. The government argues that Bankman-Fried has attempted to interfere with witnesses, including trying to contact an undisclosed “FTX US current general counsel” who may be a trial witness, through Signal.

Judge Lewis Kaplan stated that there is sufficient reason to believe Bankman-Fried violated the conditions of his bail by attempting to interfere with witnesses. Since then, Bankman-Fried has been held at the Metropolitan Detention Center in Brooklyn, where he will remain during the trial. A panel of judges from the Second Circuit Court of Appeals rejected his bail appeal on September 21st, agreeing with Judge Kaplan’s view that Bankman-Fried may have attempted to interfere with witnesses.

Expert Witness Issues

In addition to the denied bail appeal, Bankman-Fried’s legal team suffered a second setback on September 21st as Judge Kaplan barred seven of Bankman-Fried’s expert witnesses from testifying in October. The government had previously sought to exclude these witnesses’ testimony. Some of the expert witnesses may have the opportunity to rebut the prosecution’s witnesses’ testimony if Bankman-Fried provides additional disclosures, although the government has the right to object.

Expected Witnesses

During the trial, the government expects to summon several former FTX employees and Bankman-Fried’s old acquaintances as witnesses, including Ellison, former FTX CTO Gary Wang, and former FTX Engineering Director Nishad Singh.

Pre-Trial Events

Before the trial start date, let’s look back at some events since Bankman-Fried’s arrest in December last year.

Initial Charges

On December 13th last year, the US Department of Justice and the Securities and Exchange Commission announced charges against Bankman-Fried. Initially, he was charged with eight counts of fraud, money laundering, and campaign finance violations.

Charges Dismissed

However, in July of this year, the Department of Justice announced in a letter to the judge that it would dismiss the charges because the Bahamas did not extradite Bankman-Fried on those charges. In May of this year, Bankman-Fried’s defense attorney moved to dismiss most of the criminal charges against him, but was unsuccessful, leading to the dismissal of the charges. One month later, the Department of Justice brought forth seven charges of fraud and conspiracy, to which Bankman-Fried pleaded not guilty.

Statement Regarding Allegations

A lawsuit filed on August 14th alleges that Bankman-Fried used stolen $100 million in customer funds to donate to various political candidates and political action committees (LianGuaiC).

Legal Dispute with Google

In late August, Bankman-Fried and his team communicated with the government in legal documents due to prosecutors producing about 8 million documents from Bankman-Fried’s Google account. The government claimed the delay in discovery was due to Google’s error. The defense argued that the additional discovery was unfair and that there was not enough time for trial preparation. During a hearing, Judge Kaplan urged the defense to consider requesting an extension, but he did not commit to granting an extension. Bankman-Fried’s team did not make such a request.

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