The Trial of Sam Bankman-Fried: Live Blog, Latest News and Insights

The trial of Sam Bankman-Fried, the disgraced founder of FTX and former crypto billionaire, has begun.

Federal prosecutors accuse him of masterminding one of the most significant financial frauds in U.S. history. Bankman-Fried, once celebrated as a crypto billionaire, is alleged to have orchestrated a multibillion-dollar fraud. He faces charges related to defrauding customers on his digital currency exchange, FTX. The accusations include wire fraud, securities fraud, and money laundering.

The case has been described by Damian Williams, U.S. Attorney for the Southern District of New York, as “one of the biggest financial frauds in American history.” Bankman-Fried’s trial could potentially last up to six weeks.

This post will be regularly updated throughout the trial.

Wednesday, October 4

DOJ says no regs isn’t an excuse (1 a.m. ET)

Early in the morning on Wednesday, the U.S. Department of Justice (DOJ) filed a formal letter to Judge Lewis Kaplan, to clarify that a lack of clear crypto regulations in the U.S. is not an acceptable defense for the charges against FTX founder Sam Bankman-Fried. SBF has argued that he adhered to regulations—however sparse or unclear—since FTX was not governed in the U.S.

The letter emphasizes that the absence of specific regulations doesn’t justify the alleged misappropriation of funds. “The funds were in fact misappropriated,” the DOJ writes.

The case continues to unfold as jury selection concludes and both parties present their opening arguments in the Southern District of New York in Manhattan.

Tuesday, October 3

Potential jurors who lost money in crypto released

Several people were dismissed from the potential jury pool after voir dire questioning revealed that they had invested in cryptocurrency and ended up losing money. The pool also included people who worked for banks (including crypto-entangled Silvergate Bank), financial regulators, and investment firms. Judge Lewis Kaplan even quizzed some candidates on whether they watched Sunday’s episode of 60 Minutes on CBS, which featured a largely positive take on Sam Bankman-Fried.

One juror tried to say he didn’t understand cryptocurrency. Judge Kaplan told him, “You probably have a lot of company in this courtroom.”

Court adjourns, no jury selected

The court has adjourned for the day, and while the jury pool has been whittled down considerably, a final jury has yet to be selected. The selection process will continue tomorrow and likely conclude before the mid-day recess.

Amid questions for jurors to weigh their impartiality or potential biases, prosecutors today revealed names of previously unmentioned, yet important players in the FTX drama who may be called to testify or be mentioned at trial. Among them were former Alameda CEO Sam Trabucco, who hasn’t been heard from publicly since he stepped down from the company in August 2022.

SBF sues FTX’s insurance company

Yesterday, before his trial started, SBF’s lawyers filed a lawsuit against Continental Casualty Company (CNA), an excess insurer under a directors and officers insurance policy for Paper Bird Inc. and related companies—which includes FTX. The policy explicitly requires CNA to pay defense costs incurred by the insureds, including Bankman-Fried.

Bankman-Fried alleges in his lawsuit that CNA has refused to comply with its contractual mandate to pay his defense costs, despite multiple requests. The company is liable for up to $5 million worth of his legal fees now that $10 million worth of coverage has been exhausted.

The policy itself was signed and made effective in August 2022, a few months before the FTX founder stepped down and the company filed for bankruptcy.

Judge Lewis Kaplan addresses potential jurors

Just after 11 a.m. ET Judge Lewis Kaplan asked potential jurors if there was anything about the nature of Bankman-Fried’s case that would make it difficult for them to be fair. At least 10 people raised their hands and were excused, Decrypt’s André Beganksi reports.

One juror stated he had heard of Bankman-Fried from the Joe Rogan podcast.

SBF is in the courtroom, no plea deal on the table

Jurors entered the room just after 9 a.m. ET. The prosecution stated that there have been no plea offers extended to Bankman-Fried, which the FTX founder’s attorney then confirmed.

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Court sketch

SBF doesn’t want FTX customers to testify

Although not yet discussed in court, an early-morning filing from SBF’s team seeks to stop the DOJ from calling FTX customers as witnesses during the ex-CEO of the now-defunct crypto exchange. Bankman-Fried’s lawyers argue that victims who lost money when the exchange filed for bankruptcy might critically misunderstand the relationship they had with the exchange and therefore bias the jury against SBF.

“The subjective perspective of the victim is not the appropriate yardstick for measuring materiality,” his legal team wrote, “particularly where the witness’s own view of the legal relationship with a commercial counterparty may be mistaken.”

Jury selection

On Tuesday morning, crowds had already gathered outside the New York courthouse where jury selection will begin for Bankman-Fried’s trial. Court officials told Decrypt reporter André Beganki that there would be no “perp walk” to publicly bring Bankman-Fried into the courthouse, because he’s already in custody.

A judge dismissed a motion from Bankman-Fried’s attorneys to allow him to be released from jail during the duration of his trial. By 9 a.m., court officials had admitted him into the courthouse.

Things to know and what to expect:

Editor’s note: This article was originally published on October 3 and last updated on October 4.