Crypto itself in the dock at Sam Bankman's trial

Crypto itself in the dock at Sam Bankman's trial

Tomorrow, American marshals will transport Sam Bankman-Fried from a Brooklyn jail to Daniel Patrick Moynihan's American Courthouse in Lower Manhattan.

The immediate agenda consists of electing jurors to sit in judgement of the onetime crypto billionaire, charged with numerous counts of fraud, money laundering, and campaign finance offences in connection with the failure of the exchange FTX last November.

Crypto itself, however, is expected to be in the dock over the course of the trial, which is expected to last about six weeks.

FTX, worth $32 billion at its peak, has been a symbol of the illegality associated with the digital assets market. And with his slob chic vibe and commitment to 'effective altruism,' 31-year-old entrepreneur has come to epitomise crypto for many in the mainstream.

By shifting billions of dollars worth of FTX deposits to cover losses in his hedge fund, prosecutors said Bankman-Fried violated one of the bedrock laws in finance - never tap customer deposits to juice your own trading book.

Prosecutors are expected to try and prove that Bankman-Fried is exactly what he did, bolstered by testimony from several of his former associates, including his ex-girlfriend Caroline Ellison.

The case has heightened the fears of crypto analysts that the sector is rife with Ponzi schemes and thievery, and emboldened watchdogs like Gary Gensler, the chair of the US SEC, have been forced to crack down on civil actions.

While Bitcoin has rallied 60% since FTX filed for bankruptcy November 11, the token's trading volume has nosedived - in August, it dropped to a five-year low. The days when BTC attracted mainstream investors appear to be over, at least for now.

The market's crisis of decentralised finance has not been averted, even if it's abysmal. The deposits, or total value locked, of the sector, is still about a quarter less than before FTX's downfall at $38.7 billion, according to DefiLama data.

If Bankman-Fried had nothing to do, he appears to have proven yet again that if something seems to be too good to be true, it probably is. Which is unfortunate given the amounts of doing good that Bankman-Fried vowed to do.

Bankman-Fried, who was chairman of the FTX-Alameda company, was running his empire from a $30,000 penthouse in the Bahamas in 2022. He surrounded himself with colleagues who shared a lavish work-life space in the tropics.

Bankman-Fried charmed celebrities like superstar quarterback Tom Brady and his former wife, supermodel Gisele Bundchen, who were energetic - and well compensated - spokespersons for FTX. Lewis, the best-selling novelist of The Big Short and Moneyball, landed him as his biographer.

Lewis, who is releasing his latest book on Bankman-Fried and FTX, said he watched in amazement as the most famous people in the world would gather around the rumpled entrepreneur. The young tycoon was simply known by his initials - SBF.

A maths whiz who graduated from MIT, Bankman-Fried, was just a springboard to amassing enough wealth to address epochal challenges like pandemics and artificial intelligence. 'EA', a philosophical and social movement designed to maximize impact for the common good, is his chosen vehicle: 'effective altruism' or EA, a philosophical and social movement designed to maximize impact for the common good.

Academics and intellectuals wandered into the Bahamas to talk with Bankman-Fried and his compatriots. DL News spoke to several individuals who were privy to these discussions.

The interest in genetics, he said, boiled down to a willingness to use gene editing to increase would-be parents' odds of having kids who are happy, healthy, and smart.

''T get sad, so you can have guilt-free meat,'' said a person who asked for anonymity as a condition of talking about dealings with Bankman-Fried.

However, the interest did not translate into action. It is worth their time or money to actually do much on it, the person said of the people who met with Bankman-Fried.

The Future Fund, the philanthropic arm of FTX, dedicated $100 million to initiatives in pandemic prevention, addressing the risks of AI, and other futuristic projects.

Bankman-Fried said in his post that he considered an overly slow approval process by the US Food and Drug Administration.

The project was aimed at safeguarding humanity's long-term future and were in line with EA's thinking.

Another person familiar with Bankman-Fried's work has lamented that his alleged misdeeds tarnished the EA.

But the money wasn't his, prosecutors said. In August, the Justice Department accused FTX of using funds deposited by FTX customers to make $100 million in political campaign contributions in the run-up to the midterm elections in November.

In an updated indictment that month, prosecutors said prosecutors had sprained their profile and curry favour with candidates.

Bankman-Fried's case is the latest in a long line of bold-faced names who have faced justice in the federal court on Foley Square in downtown Manhattan.

Bernie Madoff, Ghislaine Maxwell, and Martha Stewart each passed through here on their way to guilty pleas or jury verdicts. Bankman-Fried's performance could be as much as the media's attention will be.

Bankman-Fried, who has been incarcerated for the past two months after violating his bail terms, faces the possibility he may not live outside the walls of criminal institutions for decades.

If convicted, he faces a 20-year prison sentence for each of the most significant charges in his indictment.