News - Sam Bankman-Fried to jail? Or will he go free?

By Luc Vesters

Sam Bankman-Fried to jail? Or will he go free?

FTX
Laws and regulations

Since Tuesday, October 3, Sam Bankman-Fried (SBF) has been in the dock in New York. The US has opened the trial against the founder of the bankrupt crypto exchange FTX. The charge: billion-dollar fraud. He faces more than 100 years in prison.

New York attorney Howard Fischer has spent much of his nearly 30-year career defending and prosecuting white-collar criminals, including as a senior trial lawyer with the U.S. Securities and Exchange Commissions (SEC), and is closely following the case against SBF. In an interview with BTC-ECHO, he explains how well-founded the allegations against SBF really are and what strategies the defense and prosecution are pursuing. Will Bankman-Fried really have to spend the rest of his life in prison? Or is even an acquittal on the horizon?

"SBF is convinced of its role as a victim"

The evidence against the former CEO is overwhelming. Thousands of documents, instant messages and key witnesses are cited by prosecutors against SBF. A "fraud of epic proportions" was called FTX.

The 31-year-old has so far shown himself unyielding, almost arrogant, according to witnesses. SBF pleaded "not guilty" to all charges. Seven in number: conspiracy to commit fraud in several cases, executing fraud and money laundering. "Bankman-Fried believes he is the smartest man in the room. He is firmly convinced of his own victimization," Fischer said.

Team USA vs. Team SBF

The verdict is not expected for another four to six weeks. Both sides have made their opening statements. They tell two completely different stories. On the one hand, the prosecutor's story: of the Bankman-Fried fraudster who knowingly "lied to the world." And on the other, the story of the defense lawyers, which paints a picture of a young entrepreneur whose rapid success and lack of experience had caused him to lose control of his crypto empire. A tragic mistake, but not an intentional fraud.

The legal battle is fought among the elite of the New York legal scene. "Team USA" consists of some of the best lawyers in the country. Led by Damian Williams. He already handled cases surrounding the Jeffrey Eppstein abuse scandal and also filed charges against Terra founder Do Kwon.

Sam Bankman-Fried countered with no less familiar personnel. "SBF has an excellent law firm. Cohen & Gresser has an excellent reputation in the community," Fischer says.

The credibility of witnesses

For Fischer, the defense's strategy is clear: SBF lawyers will attack the credibility of witnesses - especially Caroline Ellision. She was CEO of Alameda Research, the crypto hedge fund of the FTX empire, had occasional relationships with Sam Bankman-Fried and is now one of the prosecution's key witnesses.

"With Caroline Ellision, I imagine the defense will portray her as a vindictive woman who wants to see her ex-boyfriend in jail," Fischer says. He adds, "They might attack the plea deal. Accuse Ellision of talking out of prosecutors' mouths to save her own skin." A valid point?

Ellision also faces more than 100 years in prison. Shortly after her arrest, the 28-year-old waived her right to a trial, admitted her guilt and cooperated with authorities. At best, she hopes for a reduced sentence. Sentencing is expected in mid-December. Whether and how cooperation affects the sentence depends on several factors, Fischer said.

The seven allegations in detail

The list of charges is long. The US accuses Bankman-Fried of a total of seven crimes. Fischer summarizes the charges as follows:

The charges involve defrauding investors. There is also the use of customer funds for the benefit of Alameda. Two other charges are about defrauding Alameda's lenders. Then two more charges of conspiracy to commit commodities fraud and securities fraud. And finally, one charge of money laundering.

On which charges SBF is ultimately found guilty remains to be seen. According to Fischer, however, it is clear that "prosecutors only charge items they can prove." And evidence seems to abound.

Not only are former executives of the crypto empire cooperating with authorities. SBF's company has also turned against him. FTX, meanwhile, is also suing its founder's parents and also cooperating with prosecutors. A real stroke of luck for the prosecutors, Fischer says.

As a prosecutor, that's exactly the position you want to be in. It's all well and good to have access to documents. But it's even better to have people who were in a room with SBF and can testify that he ordered them to do illegal things. That should make it difficult for the defense to refute the allegations.

Howard Fischer told BTC-ECHO

Of course, nothing has been proven yet and the presumption of innocence applies, the lawyer continued. Based on the nature of the evidence, the cooperation of former colleagues and, not least, the quality of the prosecution, Fischer believes a conviction is "likely." What punishment then awaits him is uncertain - from fines to decades in prison, anything is possible.

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