Sam Bankman-Fried by no means acquired plea supply, prosecutor says as trial kicks off

By Jody Godoy and Luc Cohen

NEW YORK (Reuters) – Sam Bankman-Fried and U.S. prosecutors by no means engaged in talks a few potential plea deal and no such supply was made, a prosecutor stated in court docket on Tuesday forward of the beginning of the FTX cryptocurrency change founder’s fraud trial.

Mark Cohen, a lawyer for Bankman-Fried, confirmed that prosecutor Nicolas Roos was right that no plea talks had been held.

Bankman-Fried’s trial comes practically a yr after the corporate’s collapse shocked markets and tattered his popularity.

Federal prosecutors say the 31-year-old former billionaire embezzled from FTX prospects since its founding in 2019 by means of its November 2022 chapter with the intention to prop up his hedge fund Alameda Analysis, purchase luxurious properties and donate greater than $100 million to U.S. political candidates.

On the outset of proceedings, U.S. District Choose Lewis Kaplan instructed Bankman-Fried in open court docket that it could finally be his choice whether or not or to not finally testify in his personal protection, and requested Bankman-Fried whether or not he understood.

“Sure,” Bankman-Fried replied. He was wearing a go well with and tie, along with his as soon as signature curly, unkempt hair lower right into a neater trim.

Bankman-Fried has pleaded not responsible to seven counts of fraud and conspiracy. He has acknowledged insufficient threat administration, however denied stealing funds. His legal professionals have signaled in court docket papers they plan to argue that FTX’s therapy of buyer funds had been correct, and that others at FTX and Alameda bore the majority of the blame for his or her failure.

Step one within the trial might be choosing the 12-member jury that may finally weigh these competing narratives in deciding whether or not to convict Bankman-Fried.

Earlier, dozens of New York residents, many holding jury summonses of their fingers, streamed into the courthouse in decrease Manhattan forward of jury choice. A minimum of 100 potential jurors gathered in a jury meeting room within the court docket’s foyer.

Kaplan instructed prosecutors and protection legal professionals that he would start jury choice by asking the pool to point if there was any cause they might not serve.

He’s then anticipated to ask questions on their backgrounds and experiences in an effort to weed out any potential jurors who could also be biased.

The trial is anticipated to last as long as six weeks. It should function testimony from three former members of Bankman-Fried’s internal circle who’ve pleaded responsible to fraud prices themselves and agreed to cooperate with the Manhattan U.S. Lawyer’s workplace.

Bankman-Fried’s legal professionals have signaled they plan to problem the credibility of these witnesses – who embrace former Alameda chief Caroline Ellison and former FTX executives Gary Wang and Nishad Singh – by arguing they’re motivated to implicate their consumer to get a decrease sentence, a standard technique in white collar fraud circumstances.

They’ve additionally laid the groundwork to argue that Bankman-Fried believed his change was allowed to take a position prospects’ deposits so long as they had been finally in a position to take out their funds, and {that a} collection of enterprise failures – not deliberate fraud – left the change with out sufficient cash to fulfill withdrawal requests.

Bankman-Fried’s is the best profile case U.S. prosecutors have up to now introduced towards a former cryptocurrency govt.

His indictment final December marked a spectacular fall from grace for Bankman-Fried, who had garnered a popularity as a official operator in an business whose picture was pockmarked by scams and purported get-rich-quick schemes.

Prosecutors say Bankman-Fried constructed that popularity on lies and bolstered it with endorsements from celebrities and star athletes.

Bankman-Fried has been detained since Aug. 11, after the choose discovered he had seemingly engaged in witness tampering – together with by sharing Ellison’s private writings with a reporter. Ellison and Bankman-Fried are former romantic companions.

He might be delivered to court docket early on most days to permit him to arrange along with his legal professionals.