The former CEO of the bankrupt exchange is set to face 21 days in court during his criminal trial scheduled from Oct. 4 to Nov. 9. Bankman-Fried has been in pre-trial detention at the Metropolitan Detention Center since Aug. 11 and has filed several unsuccessful motions seeking his release to prepare for his trial.
United States District Judge Lewis Kaplan denied the former FTX CEO’s latest motion for release, citing concerns that Bankman-Fried was a flight risk given the severity of charges being faced and the potential length of time he could spend behind bars if convicted. The former FTX CEO has been granted permission to meet with his legal team at 7 am on active court days.
Proceedings will begin with jury selection on Oct. 3 before the trial itself gets underway on Wednesday, Oct. 4. Cointelegraph has highlighted five major talking points ahead of one of the biggest cryptocurrency-related trials in history.
What happened to FTX?
Once hailed as the darling of the cryptocurrency industry, FTX was co-founded in 2019 by Bankman-Fried and Gary Wang and went on to become a household name in the United States due to its high-profile sponsorships and campaigns.
Over the next three years, the company carried out a series of fundraising rounds that included a preliminary $900 million raise in July 2021 and another $420 million raise in October 2021. 2022 promised to be fruitful for the exchange as it kicked off the year with a further $400 million fundraising round headed up by the likes of SoftBank and Temasek, valuing the company at an estimated $32 billion.
FTX signed several major sponsorship deals during those two years. These included Mercedes’ Formula 1 team, as well as a reported $135 million deal for the naming rights of the Miami Heat’s NBA arena.
The company appeared to be in sound standing as the wider cryptocurrency ecosystem wavered after the implosion of the Terra/LUNA stablecoin. Several high-profile cryptocurrency lending firms were caught in the fallout, which led to FTX making a $240 million offer to acquire BlockFi as well as a failed bid to bailout Voyager Digital.
Things began to unravel in November 2022, with rumblings of trouble at FTX related to its relationship with Bankman-Fried’s quantitative trading firm Alameda Research and the latter’s dependence on FTX’s native exchange token FTT.
1) Hi all:
Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.
The house of cards came crumbling down as Binance CEO Changpeng ‘CZ’ Zhao announced that the exchange would sell its FTT token holdings, which played a role as a catalyst for the liquidity crisis at FTX as the value of FTT plummeted.
Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won’t pretend to make love after divorce. We are not against anyone. But we won’t support people who lobby against other industry players behind their backs. Onwards.
On Nov. 11 2022, FTX, FTX US and Alameda Research began bankruptcy proceedings, with Bankman-Fried resigning as CEO. John Ray III, the man who handled the infamous Enron bankruptcy, was appointed as acting CEO to review and monetize remaining assets of the FTX group.
Seven counts
Bankman-Fried stands accused of seven counts of conspiracy and fraud relating to the collapse of the exchange.
The U.S. Justice Department had originally announced an eight-count Indictment with fraud, money laundering, and campaign finance offenses in December 2022. This included two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering.
An excerpt from the Justice Department’s indictment of Sam Bankman-Fried on Dec. 13, 2022.
Bankman-Fried was also charged with conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations.
The latter campaign contributions charge was subsequently dropped by the Justice Department in July 2023, due to an extradition agreement with The Bahamas from whence Bankman-Fried had been deported.
Who will testify?
The Justice Department informed presiding Judge Kaplan that it would call up several witnesses for the trial, including former FTX clients, investors and staff.
The U.S attorneys noted that they expected FTX customers who had deposited funds on the defunct exchange to testify regarding their expectations and understanding of the exchange’s deposit policy and the ability to withdraw funds at any time.
Investors that purchased shares in FTX are expected to testify about their expectations of the company being a custodian of user funds as well as the full scope of custodianship in regard to cryptocurrency exchanges.
Lastly, the Justice Department expects cooperating witnesses, who pled guilty to participating in a conspiracy to commit fraud alongside Bankman-Fried, to testify about their interactions with the former CEO, as well as about statements and actions he carried out in the months leading up to the bankruptcy.
Among the cooperating witnesses expected to appear are Wang, FTX engineering director Nishad Singh and Bankman-Friend’s ex-girlfriend and former Alameda Research CEO, Caroline Ellison.
The counts of wire fraud conspiracy, wire fraud, and money laundering all carry a maximum sentence of 20 years. Meanwhile, charges of conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to defraud the United States carry five-year maximum sentences.
According to CNN, the 30-year-old could face over 100 years in prison if he is found guilty of a multitude of charges brought against him by the U.S. government.
Biggest fraud case in U.S. history?
Legal experts have already suggested that Bankman-Fried’s trial could signify one of the most significant fraud cases in U.S. history. $8.9 billion of customer deposits and investor funds went missing in the wake of FTX’s collapse, while an estimated $7.3 billion of liquid assets have since been recovered through bankruptcy proceedings.
Bernie Madoff arguably remains the most enigmatic fraud case in America, as the recent rendition of his $19 billion Ponzi scheme in a Netflix documentary highlights the grand scale of his influence and shadowy scheme.
While Bankman-Fried may not have caused as significant a level of financial harm as Madoff, his own image and that of FTX’s brand as a visibly active cryptocurrency proponent has thrust the story into the spotlight as a modern-day parallel of the late Madoff’s 17-year fraud.
Bankman-Fried also became involved in the U.S. political landscape, donating over $40 million to democratic committees and candidates in 2022. The former FTX CEO reportedly even considered paying Donald Trump $5 billion to not run for president in the United States, according to author Michael Lewis’s upcoming biography.
Bankman-Fried maintains his innocence, having pleaded not guilty to all charges brought against him in Aug. 2023.
Sir Keir Starmer and Emmanuel Macron have agreed the need for a “new deterrent” to deter small boats crossings in the Channel, Downing Street has said.
The prime minister met Mr Macron this afternoon as part of the French president’s state visit to the UK, which began on Tuesday.
High up the agenda for the two leaders is the need to tackle small boat crossings in the Channel, which Mr Macron said yesterday was a “burden” for both the UK and France.
The small boats crisis is a pressing issue for the prime minister, given that more than 20,000 migrants crossed the English Channel to the UK in the first six months of this year – a rise of almost 50% on the number crossing in 2024.
Sir Keir is hoping he can reach a deal for a one-in one-out return treaty with France, ahead of the UK-France summit on Thursday, which will involve ministerial teams from both nations.
The deal would see those crossing the Channel illegally sent back to France in exchange for Britain taking in any asylum seeker with a family connection in the UK.
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However, it is understood the deal is still in the balance, with some EU countries unhappy about France and the UK agreeing on a bilateral deal.
French newspaper Le Monde reports that up to 50 small boat migrants could be sent back to France each week, starting from August, as part of an agreement between Sir Keir and Mr Macron.
A statement from Downing Street said: “The prime minister met the French President Emmanuel Macron in Downing Street this afternoon.
“They reflected on the state visit of the president so far, agreeing that it had been an important representation of the deep ties between our two countries.
“Moving on to discuss joint working, they shared their desire to deepen our partnership further – from joint leadership in support of Ukraine to strengthening our defence collaboration and increasing bilateral trade and investment.”
It added: “The leaders agreed tackling the threat of irregular migration and small boat crossings is a shared priority that requires shared solutions.
“The prime minister spoke of his government’s toughening of the system in the past year to ensure rules are respected and enforced, including a massive surge in illegal working arrests to end the false promise of jobs that are used to sell spaces on boats.
“The two leaders agreed on the need to go further and make progress on new and innovative solutions, including a new deterrent to break the business model of these gangs.”
Chris Philp, the shadow home secretary, seized on the statement to criticise Labour for scrapping the Conservatives’ Rwanda plan, which the Tories claim would have sent asylum seekers “entering the UK illegally” to Rwanda.
He said in an online post: “We had a deterrent ready to go, where every single illegal immigrant arriving over the Channel would be sent to Rwanda.
“But Starmer cancelled this before it had a chance to start.
“Now, a year later, he’s realised he made a massive mistake. That’s why numbers have surged and this year so far has been the worst in history for illegal channel crossings.
“Starmer is weak and incompetent and he’s lost control of our borders.”
Ex-Tory chairman Sir Jake Berry has defected to Reform, in the latest blow to the Conservatives.
The former MP for Rossendale and Darwen, who served as Northern Powerhouse minister under Boris Johnson and lost his seat last year, said he had defected to Nigel Farage’s party because the Tories had “lost their way”.
Reform UK confirmed the defection to Sky News, which was first broken by The Sun.
Speaking to the paper, Sir Jake said Mr Farage’s party was the “last chance to pull Britain back from terminal decline”.
“Our streets are completely lawless,” he said.
“Migration is out of control. Taxes are going through the roof.
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“And day after day, I hear from people in my community and beyond who say the same thing: ‘This isn’t the Britain I grew up in’.”
Sir Jake accused his former party of “abandoning the British people” but said he was not “giving up”.
“I’m staying. And I’m fighting.
“Fighting for the Britain I want my kids, and one day, my grandkids, to grow up in.”
Mr Farage welcomed what he said was “a very brave decision” by Sir Jake.
“His admission that the Conservative government he was part of broke the country is unprecedented and principled,” he added.
A Conservative Party spokesman said: “Reform support increasing the benefits bill by removing the two-child cap, and nationalising British industry. By contrast the Conservatives, under new leadership, will keep making the case for sound money, lower taxes and bringing the welfare bill under control.
“We wish Jake well in his new high spend, high tax party.”
Sir Jake’s defection to Reform comes just days after former Conservative cabinet minister David Jones joined Reform UK, which continues to lead in the polls.
Image: Former Welsh secretary David Jones (R) alongside Tory MP Mark Francois. Pic: PA
Mr Jones, who was MP for Clwyd West from 2005 until standing down in 2024, said he had quit the Tories after “more than 50 years of continuous membership”.
Sir Jake was the MP Rossendale and Darwen in Lancashire between 2010 and 2024, when he was defeated by Labour’s Andy MacNae.
He held several ministerial posts including in the Department for Housing, Communities and Local Government, Energy and Climate Change and the Cabinet Office.
Image: Nigel Farage after winning the Runcorn and Helsby by-election.
Pic: Reuters
He was also chairman of the Conservative Party from September to October 2022, under Liz Truss.
Announcing his defection – which comes a year after the Tories suffered their worst ever election defeat – Sir Jake said “Britain was broken” and “the Conservative governments I was part of share the blame”.
“We now have a tax system that punishes hard work and ambition,” he said.
“Just this week, we saw record numbers of our brightest and best people leaving Britain because they can’t see a future here. At the same time, our benefits system is pulling in the world’s poor with no plan for integration and no control over who comes in.
“If you were deliberately trying to wreck the country, you’d be hard-pressed to do a better job than the last two decades of Labour and Tory rule.
“Millions of people, just like me, want a country they can be proud of again. The only way we get that is with Reform in government. That’s why I’ve resigned from the Conservative Party. I’m now backing Reform UK and working to make them the next party of government.”
He added: “And with Nigel Farage leading Reform, we’ve got someone the country can actually trust. He doesn’t change his views to fit the mood of the day. And people respect that. So do I. That’s why I believe he should be our next prime minister.”
A Labour Party spokesperson said: “Not content with taking advice from Liz Truss, Nigel Farage has now tempted her Tory Party chairman into his ranks.
“It’s clear Farage wants Liz Truss’s reckless economics, which crashed our economy and sent mortgages spiralling, to be Reform’s blueprint for Britain. It’s a recipe for disaster and working people would be left paying the price.”
In a bid to thwart further opposition to the bill following last week’s climbdown, the government said it would not try to introduce any more reforms to personal independence payments (PIP) until a review by work and pensions minister Sir Stephen Timms on the assessment process has concluded.
Sir Stephen said he wanted to finish his review by next autumn, but that the government would not agree to complete the review in 12 months as some MPs wanted.
Marie Tidball, the Labour MP who had called for the 12-month limit, later signalled she was happy with the government’s compromise.
Ministers also agreed to her calls to have a majority of the taskforce looking at PIP to be disabled or from disability organisations, and for the outcome of the review to come before any PIP changes. It will also be voted on by MPs.
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A total of 47 Labour MPs have rebelled against the government to vote against its welfare reforms.
Mother of the House Diane Abbott, former minister Dawn Butler, Andy McDonald, Stella Creasy and Jonathan Brash were among those in the “no” lobby.
Meanwhile, MPs rejected a separate amendment by Green MP Sian Berry, which called for the basic rate of universal credit to increase by 4.8% above inflation each year until 2030.
A total of 39 Labour MPs voted for scrapping the clauses that halved Universal Credit for new claimants – the only major cut left in the bill after the government made its concessions.
The passing of the bill will come as a relief to Sir Keir Starmer, who last week was forced into a humiliating climbdown over his flagship welfare package in the face of significant opposition from his own MPs.
Prior to the vote last Tuesday, the government offered significant concessions including exempting existing personal independence payment claimants (PIP) from stricter new criteria and only freezing and cutting the universal credit health top-up for new applications.
As the vote last week unfolded, it offered further confessions amid concerns the bill could be voted down – notably, that changes in eligibility for PIP would not take place until a review he is carrying out into the benefit is published in autumn 2026.
They ended up voting for only one part of the plan: a cut to Universal Credit (UC) sickness benefits for new claimants from £97 a week to £50 from 2026/7.
A total of 49 Labour MPs voted against the bill – the largest rebellion in a prime minister’s first year in office since 47 MPs voted against Tony Blair’s Lone Parent benefit in 1997, according to Professor Phil Cowley from Queen Mary University.