Fortune Crypto’s Jeff Roberts and Leo Schwartz discuss possible outcomes of the year’s biggest court case.
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00:00 Hello, everyone, and welcome to Let's Discuss, where we break down the hottest news topic
00:05 of the day.
00:06 Today we're here to talk about the trial of Sam Bankman-Fried, the crypto con man extraordinaire.
00:11 With me today, I have Leo, who's been covering the case very closely for Fortune.
00:15 So just give us a quick reminder.
00:17 Why is Sam Bankman-Fried going on trial?
00:19 When does it start?
00:20 How long will it last?
00:21 So Sam Bankman-Fried is the founder of FTX, at one time the largest or one of the largest
00:26 crypto exchanges in the world, until its spectacular collapse in November.
00:31 So federal prosecutors have charged him with a number of counts related to the collapse,
00:35 including using customer funds for his own purposes, from covering up holes in the balance
00:40 sheet to political donations and personal expenditures.
00:44 So that trial is set to start on October 3rd, will likely last around six weeks.
00:49 Right.
00:50 So in effect, he's being charged with taking customer money and spending it on, you know,
00:55 trading, gambling, political bribes, all sorts of things.
00:59 Yes.
01:00 Yeah.
01:01 So this was an exchange that was handling billions of dollars of trades.
01:04 Basically they were taking customer money, using it for their own purposes.
01:07 Right.
01:08 And the charge, I believe, is fraud, money laundering, things of that nature.
01:13 Yeah, there's a handful of charges, and there will also be a later trial for even more ones,
01:17 including bribery of a Chinese official.
01:19 Oh my goodness.
01:20 It sounds like he's in deep trouble.
01:21 I guess one thing, Leo, you've been closer, you're out in the Bahamas.
01:24 You saw this, you know, unfold in real time.
01:27 But what I'm curious about is, I mean, he seems guilty six ways to Sunday.
01:30 I mean, yes, he's presumed innocent.
01:31 I'm not saying he isn't.
01:33 But you know, what is his defense?
01:35 I mean, he's got all his former lieutenants.
01:37 His girlfriend is testifying against him.
01:39 So how does he think he's going to get out of this?
01:41 Yeah.
01:42 I mean, the big issue is that a number of his inner circle has turned against him and
01:45 cooperated with prosecutors.
01:48 Basically his defense is going to be one thing called advice of counsel, which is basically
01:52 that his lawyers give him bad advice.
01:54 The other is basically saying crypto is filled with things like this.
01:58 You know, what we were doing wasn't that bad compared to everyone else.
02:01 Not a good look for him or the crypto industry.
02:03 But what does it mean for crypto more broadly?
02:05 This has not been good for its reputation, right?
02:07 Yeah.
02:08 I mean, it's terrible from a PR perspective for crypto.
02:10 I think right now, this being really the trial of the decade, it's pretty inescapable to
02:15 connect the crypto industry with Sam Bankman Freed.
02:17 Yeah.
02:18 And let's talk about like what the term he could face.
02:20 I was talking to one lawyer, he said this is a once in a decade thing.
02:22 There was Enron, there was Bernie Madoff.
02:24 Ten years later, now we have this.
02:26 You know, what's your impression?
02:27 Is there a chance he could go away for a very long time?
02:29 Yeah.
02:30 So this is billions of dollars of customer money we're talking about.
02:33 So it does seem like decades of jail time could be in play.
02:36 Right.
02:37 And just to recap, when are we going to hear a verdict, do you think?
02:39 So the trial starts October 3rd with jury selection.
02:43 Prosecutors have said it should take around six weeks.
02:45 OK.
02:46 Well, Leo, obviously a lot coming down the pike.
02:48 But you know, to boil it down, what's your over/under on whether he goes to prison?
02:52 Well, you're the lawyer, but given the amount of people who have turned against him, it
02:55 seems pretty likely he'll be found guilty.
02:58 That seems like a pretty good bet to me.
02:59 I'm sure we'll be hearing a lot more about Mr. Bankman Freed soon.
03:02 Thanks for tuning in to Let's Discuss.
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