Crypto founder Sam Bankman-Fried's defence a hail-mary defence, says lawyer

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Crypto founder Sam Bankman-Fried's defence a hail-mary defence, says lawyer

Sam Bankman-Fried is not a fraudster, but a businessman who made catastrophic mistakes amid an industry-wide meltdown, his defence attorneys said in their opening statement Wednesday.

But it's a hail-mary defence with only slim chances of success, according to one lawyer following the case.

''It is too dumb to commit this crime - works only very, very rarely,'' Carl Volz, a Chicago-based securities attorney who has defended crypto clients, told DL News.

The trial of FTX's disgraced co-founder is expected to last several weeks, and opening statements from prosecutors and Bankman-Fried's defence attorney gave observers a hint of the arguments to come.

The stakes are high. Bankman-Fried faces seven charges, and could spend the rest of his life in prison if convicted.

Prosecutors said Bankman-Fried committed 'fraud on a massive scale,' according to the New York Times.

One of the prosecutors, Thane Rehn, said: ''I'm not sure if there's a conspiracy,'' he said.

Bankman-Fried alleged that he used those funds to buy luxury real estate in Bahamas, donate to politicians and plug a multi-billion-dollar hole at Alameda Research, the hedge fund he founded before FTX.

Although Rehn had named Caroline Ellison Alameda's co-CEO, Bankman-Fried called the shots.

The collapse in crypto prices has resulted in FTX and sister company Alameda Research, a hedge fund also founded by Bankman-Fried, Cohen said.

To make matters worse, Alameda CEO Caroline Ellison failed to follow Bankman-Fried's advice that she attempt to hedge Alameda's positions in the event that crypto prices fell, Cohen said.

It's not a crime to run a business in good faith that goes through a storm, he said, according to the New York Times.

Volz said that the defence is the last harbour for someone who doesn't have other avenues.

Bankman-Fried is to be sentenced to each of his seven charges. Part of the challenges facing Cohen is that a portrait of Bankman-Fried would emerge over the course of the trial, not of a dopey CEO, but a brilliant, imperious startup founder, Volz said.

What is your take on the Sam Bankman-Fried trial?