Crypto founder's lawyer says he never intended to defraud anyone

Crypto founder's lawyer says he never intended to defraud anyone

The collapse of FTX in 2022 was not the result of fraud or a deliberate scheme to steal from customers, but it was just the nature of a volatile cryptocurrency market, said Sam Bankman-Fried's lawyer, Sam Bankman-Fried.

Bankman-Fried, 31, of Manhattan, sat in his trial on Wednesday in a Manhattan court where he faces seven criminal charges. Federal prosecutors allege Bankman-Fried was behind frauding customers and siphoning their money to make outside investments like real estate and political donations.

Bankman-Fried's lawyer, Mark Cohen, argued on Wednesday that he never intended to defraud anyone or mislead customers to get them to invest in FTX.

And when it comes to the crypto exchange's collapse - causing more than $8 billion of customer funds to vanish - that was simply an unlucky outcome of investing in an unpredictable market with many factors that no one can control, Cohen said.

In the lead-up to FTX's downfall last November, the cryptocurrency exchange's valuation reached $32 billion, while the price of some of the world's largest tokens such as Bitcoin and Ether were in freefall. The crypto market was worth less than $1 trillion in 2015, for the first time since 2021.

Cryptocurrency's market cap, at $1.08 trillion, is around $1.08 trillion, according to Statista.

That kind of turbulence is exactly what can overwhelm burgeoning companies like FTX, Cohen said.

Prosecutors, however, argued that Bankman-Fried's crypto empire was built on lies and that the founder used his investor funds to funnel it to other investments without letting them know.

Bankman-Fried, a lawyer on his bankruptcy team, said last year that Bankman-Fried ran his company like his 'personal fiefdom' and that FTX spent almost $300 million on real estate in the Bahamas.

While Cohen tried to play up the issue of the cryptocurrency market, several cryptocurrency executives and leaders believe that the problem lies in what they may characterize as fraudsters like Bankman-Fried, not the digital currency itself.

Qiao Wang, the founder of Alliance, an accelerator for crypto start-ups, told the magazine that people like Bankman-Fried have caused others to sour on the crypto world.