Sam Bankman-Fried’s in New York as Major Fraud Trial Kicks off for Crypto King
Key takeaways
- Former FTX founder Sam Bankman-Fried fraud and money laundering trial has started in New York
- The drama tanked the crypto market and set off a string of SEC investigations into crypto companies
- Bitcoin and Ether prices have both languished ever since
Remember the Crypto King? Sam Bankman-Fried is hard to forget: not for his unassuming demeanor and mop of curly hair, but because the collapse of his company FTX last year basically tanked the entire crypto market.
That’s quite an unfortunate accolade to have associated with your name. SBF now faces significant fraud charges and decades in prison if he’s found guilty — and the government has a good track record in cases like these.
Need a recap of the SBF, FTX crypto drama? Keep reading.
Sam Bankman-Fried and FTX’s downfall
Do you remember where you were when FTX collapsed? Okay, probably not, but it was a massive deal for the crypto world that still hasn’t recovered.
The Department of Justice has accused Bankman-Fried of using customer funds in FTX to pay for a lavish lifestyle, including buying property and becoming one of the most influential political donors. He now faces seven charges of money laundering and fraud in the courts.
SBF has admitted to inadequate record keeping but denies any wrongdoing. The spanner in the works is that four of his closest allies, including former Alameda Research CEO Caroline Ellison, have pleaded guilty — and three of them are planning on testifying against him.
Bankman-Fried has been in prison since August, formerly under house arrest at his parents’ home in California. Administrators for FTX have since recovered $7 billion as of August from the $8 billion black hole in FTX’s finances.
How is the crypto market faring?
The FTX collapse sparked a string of investigations from the SEC, who went after crypto companies with a vengeance. Many have been under investigation since, including Ripple, Coinbase, and now even Binance, to name a few.
There are some silver linings for crypto: bankrupted crypto lender Celsius wants to restart as a user-owned Bitcoin miner. Ripple succeeded in its SEC investigation after a judge ruled that the cryptocurrency hadn’t broken any securities laws, and the SEC has now lost its right to appeal.
As of this week, Bitcoin prices are down 3.3% since the start of the week in the $27,500 region after failing to sustain breaking the $28,500 ceiling on Monday. Ethereum prices have seen a 4.5% drop in the same time and are trading at around $1,650.
Both of these are a far cry from the heady heights of crypto’s 2021 prices, where Ethereum was trading for over $4,600 at its height, and Bitcoin’s all-time high was close to $69,000.
The bottom line
The Sam Bankman-Fried trial will continue for some time, with the jury’s verdict potentially impacting the entire future of crypto and its reputation. SBF’s legal team are likely praying for a miracle — or a sympathetic juror — while the rest of the crypto world watches on.
