Sam Bankman-Fried took more than $10 billion from unsuspecting customers of his now-bankrupt FTX cryptocurrency exchange, a U.S. prosecutor said Wednesday in opening statements at the 31-year-old former billionaire's fraud trial.
Prosecutors with the U.S. Attorney's office in Manhattan say Bankman-Fried used FTX customer money from the exchange's 2019 launch until its November 2022 bankruptcy in order to prop up his hedge fund, Alameda Research, buy luxury real estate, and donate to U.S. political campaigns and candidates.
When Alameda's risky investments in cryptocurrency began to lose money in May and June of last year, Bankman-Fried "doubled down" and took more money from FTX than ever before, Rehn said. But he said the scheme fell apart in November 2022, when a leaked Alameda financial statement set off panic by FTX customers.
His lawyers are expected to try to shift the blame for FTX's dramatic failure to the cooperating witnesses, and argue they are implicating Bankman-Fried in order to seek lenient sentences.Prosecutors are expected to call three former members of Bankman-Fried's inner circle - former Alameda chief executive Caroline Ellison and former FTX executives Nishad Singh and Gary Wang - to testify against him. All three have pleaded guilty and agreed to cooperate with prosecutors.
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