The trial of former crypto billionaire Sam Bankman-Fried, accused of stealing from customers of his FTX cryptocurrency exchange, will begin on Tuesday.
The trial comes nearly a year after FTX’s collapse shocked markets and tattered his reputation.
Federal prosecutors allege the 31-year-old embezzled from FTX customers since its founding in 2019 through to its November 2022 bankruptcy in order to prop up his hedge fund Alameda Research, buy luxury properties and donate more than $100 million (£82.7m) to US political candidates.
Bankman-Fried has pleaded not guilty to seven counts of fraud and conspiracy.
He accepts failings in the business, but has denied stealing funds from customers.
Court papers suggest his lawyers intend to argue that FTX’s treatment of customer funds were proper, and that others at FTX and Alameda bore the bulk of the blame for their failure.
The first step in the trial is the selection of the 12-member jury that will ultimately decide whether to convict Bankman-Fried.
Dozens of New York residents began streaming into a federal courthouse in lower Manhattan ahead of jury selection on Tuesday.
The trial, led by US District Judge Lewis Kaplan, is expected to last up to six weeks.
It will feature testimony from three former members of Bankman-Fried’s inner circle who have pleaded guilty to fraud charges themselves and agreed to cooperate with prosecutors.
Bankman-Fried’s lawyers have signalled they plan to challenge the credibility of those witnesses - former Alameda chief Caroline Ellison, and former FTX executives Gary Wang and Nishad Singh - by arguing they are motivated to implicate their client to get a lower sentence for themselves.
They are also expected to argue that Bankman-Fried believed his exchange was allowed to invest customers’ deposits as long as they were ultimately able to take out their funds.
It is thought they will claim that a series of business mistakes, not fraud, left the exchange without enough money to meet withdrawal requests.
Bankman-Fried’s is the highest profile case prosecutors have so far brought against a former cryptocurrency executive.
His indictment last December marked a spectacular fall from grace for a man once hailed as a visionary of the cryptocurrency industry.
Prosecutors claim Bankman-Fried built that reputation on lies and bolstered it with endorsements from celebrities and star athletes.
Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn since August 11, after the judge found he had likely engaged in witness tampering.
He will be brought to court early on most days to allow him to prepare with his lawyers.
