FTX collapse: Crypto goes on trial, as Sam Bankman-Fried faces his reckoning

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FTX collapse: Crypto goes on trial, as Sam Bankman-Fried faces his reckoning
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The FTX founder’s uphill court battle starts this week, after he has come to symbolise everything that went wrong with the cryptocurrency industry.

A year ago, Sam Bankman-Fried was a fixture on magazine covers and in the halls of the US Congress, a tousle-haired crypto billionaire who hobnobbed with movie stars and bankrolled political campaigns.

The trial will offer a window into the Wild West-style financial engineering that fuelled crypto’s growth and, many of whom lost their savings when the market crashed. Lawyers on both sides of the case are expected to lay bare the culture of scams and risk-taking that surrounded FTX and to dissect the often-misleading publicity campaigns that helped drive years of crypto hype.

For the past month and a half, Bankman-Fried has also had to prepare his case from a jail cell in Brooklyn, after Kaplan revoked his bail, ruling that he had tried to interfere with witnesses.“It doesn’t appear that there’s any sort of path to victory” for Bankman-Fried, said Renato Mariotti, a former federal prosecutor.

Known for his signature outfit of T-shirts and shorts, Bankman-Fried rose to prominence as a rare good guy in the loosely regulated world of crypto. He founded FTX in 2019 and raised $2 billion in venture funding, promising to work with regulators to write new rules for the industry. He was also a prolific political donor, contributing more than $5 million to support Joe Biden’s 2020 presidential run.

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