NEW YORK (AP) — Jury choice started Tuesday in the fraud trial of FTX founder Sam Bankman-Fried after a prosecutor revealed that no discussions a few potential plea settlement happened in the ten months because the cryptocurrency government was arrested and delivered to the USA.
As soon as a billionaire, the 31-year-old crypto mogul faces the chance of an extended jail time period if convicted at a trial that’s anticipated to last as long as six weeks.
Prosecutors say he defrauded folks and monetary establishments who had accounts price billions of {dollars} on the cryptocurrency alternate by illegally diverting massive sums of their cash for his private use, together with making dangerous trades at his cryptocurrency hedge fund, Alameda Analysis. He is additionally accused of utilizing buyer cash to purchase actual property and make massive political contributions as he tried to affect authorities regulation of cryptocurrency.
U.S. Lawyer Damian Williams, who’s overseeing the prosecution, has referred to as it one of the largest frauds in the nation’s historical past.
Earlier than about 50 potential jurors had been introduced right into a Manhattan courtroom, Assistant U.S. Lawyer Nicolas Roos mentioned that the federal government “early on” raised the query with legal professionals for Bankman-Fried about whether or not negotiations aimed toward resolving the case with a plea ought to happen.
“There have been no discussions a few plea, and the federal government by no means made any plea affords,” he mentioned.
In interviews and social media posts, Bankman-Fried has acknowledged making enormous errors whereas operating FTX however insisted he had no felony intent.
He has blamed FTX’s collapse final November, in one thing equal to an old style financial institution run, on vindictive opponents, his personal inattentiveness and fellow executives who he mentioned did not handle threat correctly.
“I didn’t steal funds, and I definitely didn’t stash billions away,” he mentioned in a publish earlier this yr on the web platform Substack.
As not too long ago as early final fall, Bankman-Fried portrayed himself as a stabilizing drive in the cryptocurrency business. He spent thousands and thousands of {dollars} on superstar ads throughout the 2022 Tremendous Bowl that promoted FTX because the “most secure and easiest method to purchase and promote crypto” and “essentially the most trusted approach to purchase and promote” digital property.
Comic Larry David, together with different celebrities reminiscent of soccer star Tom Brady and basketball star Stephen Curry, have been named in a lawsuit that argued their superstar standing made them culpable for promoting the agency’s failed enterprise mannequin.
Bankman-Fried is charged with wire fraud and conspiracy. The trial is predicted to finish earlier than Thanksgiving.
He agreed to be extradited to the USA after his arrest in the Bahamasfinal December. That was weeks after FTXcollapsedas prospects pulled deposits en masse amid stories questioning its monetary preparations.
Whereas his aircraft to the U.S. was in the air, authorities introduced that two of his high executives had secretly pleaded guilty to fraud expenses and had been ready to testify towards him. They had been Bankman-Fried’s former girlfriend Carolyn Ellison, who had been the chief government of Alameda Analysis, and Gary Wang, who co-founded FTX.
Initially freed on a $250 million private recognizance bond, Bankman-Fried was confined to his dad and mom’ dwelling in Palo Alto, California, till Decide Lewis A. Kaplan ordered him jailed final month after concluding that he had tried to affect witnesses, together with Ellison and an FTX common counsel.
His legal professionals have appealed that call and repeatedly mentioned their shopper cannot correctly put together for trial. However the 2nd U.S. Circuit Courtroom of Appeals rejected an enchantment of the detention order, saying the decide had totally thought-about all related elements and protection arguments had been unpersuasive.
On Tuesday, earlier than jury choice started, the decide informed Bankman-Fried that he might be given the prospect to testify throughout the trial, even when his legal professionals advise towards it.
“They will’t make the choice for you. It’s your name,” the decide mentioned.
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By LARRY NEUMEISTER