Federal prosecutors have disclosed a portion of their witness list for the impending trial of Sam Bankman-Fried (SBF), the founder of the now-defunct FTX exchange. The trial is set to commence on October 3, with prosecutors intending to present testimony from FTX customers and investors impacted by the firm’s collapse in November.
The focus is on elucidating how these individuals anticipated FTX would manage their digital assets, contrasting with the eventual utilisation of those assets. Testimonies are expected to illustrate the witnesses’ understanding of their relationships with SBF and his companies, shedding light on the interpretations of representations made by SBF regarding FTX’s handling of customer assets.
In a related development, the prosecution plans to call on non-U.S. citizens, including an unnamed Ukrainian citizen (referred to as “FTX-Customer 1”), to testify remotely due to restrictions on Ukrainian males over 18 leaving the country amid the ongoing conflict with Russia. FTX’s significant client base was international, with U.S. customers accessing the platform through a subsidiary. FTX-Customer 1 reportedly lost a substantial portion of their life savings entrusted to FTX after the conflict began.
The prosecution is also relying on testimonies from unnamed co-conspirators who have entered guilty pleas or received immunity from the government. The aim is to demonstrate the agreement between these individuals and SBF in perpetrating the scheme that led to FTX’s failure. Notable figures in SBF’s inner circle, such as FTX co-founder Gary Wang, former head of engineering Nishad Singh, and former CEO of Alameda Research Caroline Ellison, have already cooperated with prosecutors.
SBF, facing charges including money laundering, wire fraud, and illegal political donations, could potentially face decades in prison if convicted. The trial is expected to begin with jury selection on October 3, followed by opening arguments on October 4.
SBF’s defense has raised objections to the government’s proposed questions for potential jurors, claiming unfairness and prejudice. The defense particularly contested the use of the term “fraud” instead of “alleged fraud” and questioned the adequacy of the proposed questions to identify bias among potential jurors.
Legal experts opine that SBF’s prospects do not look favorable, with predictions of a potential life sentence if found guilty of committing fraud. Factors contributing to this grim outlook include the severity of the alleged crimes, potential tampering with witnesses, and the lack of perceived mitigation in SBF’s behavior. The defense is expected to employ tactics to portray SBF as a scapegoat influenced by others, emphasizing his purported lack of clarity regarding industry regulations.
Despite the defense’s efforts, Judge Lewis Kaplan denied a motion for SBF’s temporary release during the trial, expressing concerns about flight risk, especially given the potential for a lengthy prison sentence if convicted. The judge, however, granted SBF permission to arrive at court early on trial days to consult with his legal team.
The trial is scheduled to last from October 4 to November 9, with jury selection beginning on October 3. The prosecution estimates their case could take four to five weeks, while the defense anticipates a more streamlined presentation lasting up to a week and a half. The trial calendar includes breaks on certain days, public holidays, and weekends, with the expectation that the trial will conclude by Thanksgiving in late November.