Sam Bankman-Fried, the CEO and founder of cryptocurrency exchange FTX, is set to go on trial on Tuesday, June 1st in the U.S. District Court in San Francisco. The trial will consider a civil complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) earlier this year alleging that Bankman-Fried, his companies, and two other associates, namely Jonathan Leong and Candace Ho, engaged in “an illegal $18.6 million pre-operation options offering” for cryptocurrency tokens at the start of 2019.
The trial is set to consider the charges put forward by the CFTC and determine the amount of penalties Bankman-Fried and his associates must face if found guilty of the charges brought against them. The CFTC is seeking financial penalties, disgorgement, and permanent registration and/or trading bans against the accused.
Since the charges were brought to light, Bankman-Fried and his company have publicly denied any wrongdoings, arguing that the transaction in question was not an illegal option offering. “We have never engaged in any fraudulent or manipulative activities,” the FTX Exchange said in a statement. Bankman-Fried also labeled the CFTC’s allegations “baseless and untrue”.
The upcoming trial follows the May 18th hearing when U.S. District Court Judge Haywood S. Gilliam granted a motion for summary judgment which granted the CFTC with the basis for their lawsuit. Judge Gilliam concluded that Bankman-Fried and his company FTX, LLC, committed several violations of the Commodity Exchange Act (CEA) by offering option contracts without having registered as a swap execution facility beforehand.
The trial is expected to last a few days, with a panel of witnesses from the CFTC, FTX, and other involved parties likely to present their testimonies. Bankman-Fried has so far declined to make any direct comment regarding the trial. Given the high-stakes involved, the outcome of the trial could have significant implications for the global cryptocurrency industry, so itll be followed on with the utmost attention by the public.
