What’s next for FTX’s Sam Bankman-Fried?
Former FTX CEO Bankman-Fried’s “complicated” legal battle has many unknown elements that will see him spending the next nine months in “lawyers’ board rooms” leading up to his trial on Oct. 2, according to crypto legal experts.
Since FTX first declared bankruptcy in Nov.2022, Bankman-Fried has experienced a rollercoaster of events.
He was extradited from the Bahamas back to his homeland United States, and released on bail with a $250 million bond after his parents and other “unknown parties” put their home and assets up as collateral.
It’s unclear how much money left the once-billionaire has after he told Axios in Nov. 2022 he is down to his final $100,000.
Speaking to AIBC, Agustin Barbara, managing partner of The Crypto Lawyers, believes that it is an “extremely complicated case” that touches many areas of foreign, and domestic law and policy.
Barbara said the sheer volume of parties, claims and multifaceted legal issues surrounding the Bankman-Fried case, leave an air of uncertainty for how it will affect the crypto industry. He noted:
“It is still too early to tell how far-reaching the legal ramifications will be on the future crypto industry.”
Digital assets lawyer Liam Hennessy, partner at Gadens believes that Bankman-Fried “pleading not guilty,” is advantageous for him as he can see “what the prosecution has against him.”
He added that it allows time for Bankman-Fried’s lawyers to conduct a “discovery process,” where they are able to buy time, assess the evidence and attempt to “push back on the weaker claims.”
Hennessy believes that one of the major complications come about from the fact that the US division of FTX “was pretty clean,” which actually works in Bankman-Fried’s favor.
Bankman-Fried has been very vocal about FTX US being solvent, having stated that it is likely to be “hundreds of millions of dollars in excess of customer balances” in his blog on Jan.18.
Hennessy noted another complication is how much Bankman-Fried can claim ignorance to.
He said that Bankman-Fried has the ability to claim that “he is a CEO,” and say, “I didn’t know,” and try to blame it on the fact that he had a compliance officer, a CFO, and others that should have been “across the financials” of the company.
On the flipside, Hennessy said that his former executives, CEO of Alameda Research Caroline Ellison and FTX co-founder Gary Wang pleading guilty, is “not good at all” for Bankman-Fried’s situation as they will be working to “point the finger” at him.
As for what the next few months hold for Bankman-Fried, Hennessy believes it is going to be a tedious time for the former FTX CEO.
“I think Sam Bankman-Fried’s future is sitting in a lot of lawyers’ board rooms,” Hennessy said.
Barbara believes the next few months will be primarily focused on a comprehensive search to identify all creditors and interested parties.
This search could be a timely and complicated exercise as FTX revealed there may be more than one million creditors between the exchange and its sister companies in a bankruptcy court filing in Nov. 2022.
Crypto influencer Tiffany Fong, who has been actively communicating with Sam Bankman-Fried since her exclusive interview with the former FTX CEO at his house, told AIBC that he doesn’t seem to want to “ruminate” on the worst-case scenario “a long-term prison sentence.”
Fong added that from her conversations with Bankman-Fried in the midst of the ongoing legal battle he has shown “remorse” for both FTX customers and its employees whose reputations and careers were “harmed by the collapse.”
Bankman-Fried has faced severe backlash from the public while he has been residing at his parent’s house in California.
The street that Bankman-Fried’s parents’ house is on is barricaded from the public for security reasons.
On Jan. 19 a car drove into the metal barricade outside Bankman-Fried’s house, who turned out to be three men who told the security guards “you won’t be able to keep us out,” according to a report from Reuters on Jan. 20.
