Sam Bankman-Fried’s trial date—here's what could happen as the FTX crypto king turned con man goes to court

Fortune

Fortune Crypto’s Jeff Roberts and Leo Schwartz discuss possible outcomes of the year’s biggest court case.

Transcript

00:00 Hello, everyone, and welcome to Let's Discuss, where we break down the hottest news topic

00:05 of the day.

00:06 Today we're here to talk about the trial of Sam Bankman-Fried, the crypto con man extraordinaire.

00:11 With me today, I have Leo, who's been covering the case very closely for Fortune.

00:15 So just give us a quick reminder.

00:17 Why is Sam Bankman-Fried going on trial?

00:19 When does it start?

00:20 How long will it last?

00:21 So Sam Bankman-Fried is the founder of FTX, at one time the largest or one of the largest

00:26 crypto exchanges in the world, until its spectacular collapse in November.

00:31 So federal prosecutors have charged him with a number of counts related to the collapse,

00:35 including using customer funds for his own purposes, from covering up holes in the balance

00:40 sheet to political donations and personal expenditures.

00:44 So that trial is set to start on October 3rd, will likely last around six weeks.

00:49 Right.

00:50 So in effect, he's being charged with taking customer money and spending it on, you know,

00:55 trading, gambling, political bribes, all sorts of things.

00:59 Yes.

01:00 Yeah.

01:01 So this was an exchange that was handling billions of dollars of trades.

01:04 Basically they were taking customer money, using it for their own purposes.

01:07 Right.

01:08 And the charge, I believe, is fraud, money laundering, things of that nature.

01:13 Yeah, there's a handful of charges, and there will also be a later trial for even more ones,

01:17 including bribery of a Chinese official.

01:19 Oh my goodness.

01:20 It sounds like he's in deep trouble.

01:21 I guess one thing, Leo, you've been closer, you're out in the Bahamas.

01:24 You saw this, you know, unfold in real time.

01:27 But what I'm curious about is, I mean, he seems guilty six ways to Sunday.

01:30 I mean, yes, he's presumed innocent.

01:31 I'm not saying he isn't.

01:33 But you know, what is his defense?

01:35 I mean, he's got all his former lieutenants.

01:37 His girlfriend is testifying against him.

01:39 So how does he think he's going to get out of this?

01:41 Yeah.

01:42 I mean, the big issue is that a number of his inner circle has turned against him and

01:45 cooperated with prosecutors.

01:48 Basically his defense is going to be one thing called advice of counsel, which is basically

01:52 that his lawyers give him bad advice.

01:54 The other is basically saying crypto is filled with things like this.

01:58 You know, what we were doing wasn't that bad compared to everyone else.

02:01 Not a good look for him or the crypto industry.

02:03 But what does it mean for crypto more broadly?

02:05 This has not been good for its reputation, right?

02:07 Yeah.

02:08 I mean, it's terrible from a PR perspective for crypto.

02:10 I think right now, this being really the trial of the decade, it's pretty inescapable to

02:15 connect the crypto industry with Sam Bankman Freed.

02:17 Yeah.

02:18 And let's talk about like what the term he could face.

02:20 I was talking to one lawyer, he said this is a once in a decade thing.

02:22 There was Enron, there was Bernie Madoff.

02:24 Ten years later, now we have this.

02:26 You know, what's your impression?

02:27 Is there a chance he could go away for a very long time?

02:29 Yeah.

02:30 So this is billions of dollars of customer money we're talking about.

02:33 So it does seem like decades of jail time could be in play.

02:36 Right.

02:37 And just to recap, when are we going to hear a verdict, do you think?

02:39 So the trial starts October 3rd with jury selection.

02:43 Prosecutors have said it should take around six weeks.

02:45 OK.

02:46 Well, Leo, obviously a lot coming down the pike.

02:48 But you know, to boil it down, what's your over/under on whether he goes to prison?

02:52 Well, you're the lawyer, but given the amount of people who have turned against him, it

02:55 seems pretty likely he'll be found guilty.

02:58 That seems like a pretty good bet to me.

02:59 I'm sure we'll be hearing a lot more about Mr. Bankman Freed soon.

03:02 Thanks for tuning in to Let's Discuss.

03:04 (upbeat music)

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