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SBF trial to begin as judge says he faces “very long sentence” if convicted

Wearing a suit, former FTX CEO Sam Bankman-Fried pictured from the side as he arrives at court.
Enlarge / Former FTX CEO Sam Bankman-Fried arrives for a bail revocation hearing at US District Court on August 11, 2023, in New York City.

Getty Images | Michael Santiago

Sam Bankman-Fried’s criminal trial is beginning this week with jury selection on Tuesday morning. SBF, the 31-year-old man behind bankrupt cryptocurrency exchange FTX, is facing seven criminal charges with maximum sentences adding up to 110 years.

“Your client in the event of conviction could be looking at a very long sentence,” US District Judge Lewis Kaplan told SBF’s lawyers in a hearing on Thursday while rejecting the defense’s request for a temporary release from jail. “If things begin to look bleak… maybe the time would come when he would seek to flee,” Kaplan said, according to a Reuters article.

Bankman-Fried was previously under house arrest but was sent to jail in August after his bail was revoked. In their request for a temporary release, SBF’s lawyers said the “case is highly technical and complex, and we need our client to help us understand the facts and explain many of the issues. He alone knows the facts which are also critical in preparing his defense.”

Arguing that he isn’t a flight risk, Bankman-Fried lawyer Mark Cohen “said there was ‘nothing in the record’ to suggest that his client would try to flee,” Reuters wrote. “He said Bankman-Fried had voluntarily consented to extradition from the Bahamas—where FTX was based—to the United States after his December 2022 arrest.”

Jury selection is scheduled to begin at 9:30 am ET tomorrow in US District Court for the Southern District of New York, located in Manhattan. Opening arguments in the trial are scheduled to begin Wednesday.

7 charges now, 5 more in March 2024 trial

The seven charges in this trial are wire fraud on customers of FTX, conspiracy to commit wire fraud on customers of FTX, wire fraud on lenders to Alameda Research, conspiracy to commit wire fraud on lenders to Alameda Research, conspiracy to commit securities fraud on investors in FTX, conspiracy to commit commodities fraud on customers of FTX in connection with purchases and sales of cryptocurrency and swaps, and conspiracy to commit money laundering.

The five charges related to wire fraud and money laundering carry maximum sentences of 20 years each, while the two securities and commodities fraud charges have maximum sentences of five years each. Kaplan will determine the actual sentence if the jury convicts SBF.

It’s possible that SBF could be convicted, sentenced, and then get more years tacked onto his sentence next year. That’s because the current trial doesn’t cover all 12 charges against him. Some of the charges were severed and scheduled for a separate trial expected to begin in March 2024.

The five additional counts in the March 2024 trial are for fraud on customers of FTX in connection with the purchase and sales of derivatives, securities fraud on investors in FTX, conspiracy to commit bank fraud, conspiracy to operate an unlicensed money-transmitting business, and conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act.

The indictment’s bribery charge said the bribe’s purpose “was to influence and induce one or more Chinese government officials to unfreeze certain Alameda trading accounts containing over $1 billion in cryptocurrency, which had been frozen by Chinese authorities.”

One charge for conspiracy to make unlawful campaign contributions and defraud the US Federal Election Commission was dropped.

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