NEW YORK : In U.S. prosecutors' telling, Sam Bankman-Fried embezzled money from depositors in his FTX cryptocurrency exchange ever since he launched it in 2019, and the resulting shortfall led directly to its collapse as crypto prices swooned last year.
Bankman-Fried, who quit his job as a quantitative trader at Wall Street firm Jane Street to found crypto hedge fund Alameda Research in 2017, has pleaded not guilty. FTX survived a downturn in crypto prices that saw other major digital currency platforms fail earlier in 2022, with Bankman-Fried even bailing some of them out.
"This is one of the biggest financial frauds in American history," Damian Williams, the U.S. Attorney in Manhattan, said in December 2022 upon announcing Bankman-Fried's arrest in the Bahamas, where FTX was based. "It's always been Bankman-Fried's best strategy to show that he's not a criminal mastermind - he was just out of his depth," said Mark Kasten, a defense lawyer at Buchanan Ingersoll & Rooney who is not involved in the case.
In personal writings by Bankman-Fried that were also published by the New York Times, on Sept. 14, he sought to push the blame for Alameda's failure onto Ellison.