The legal trial involving the once renowned CEO of FTX Sam Bankman Fried is set to kick off this Tuesday. Fried, accused of failing to comply with federal securities laws and misleading investors, faces charges of securities fraud.
The US Securities and Exchange Commission (SEC) believes that Fried lacked the knowledge and resources to run a sophisticated derivatives platform while also failing to put in place necessary measures to protect clients. Consequently, Fried is said to have involved himself in multiple civil violations that led to the loss of investor funds in 2018.
At the center of the case is a dispute over the protections afforded to investors in the company, which Fried and his colleagues are accused of manipulating to their advantage. Fried’s trial is expected to be closely watched by those who have been critical of the way he ran the business.
Aside from the alleged violations of federal securities laws, the SEC also claims that Fried put a stop to functioning of the company in order to permit FTX to move its headquarters to San Francisco.
Fried, who now works as the president of the Alameda Group, is expected to face a tough legal battle from the SEC and could be subject to severe penalties. It is unclear how the case will turn out, but it is likely to have serious implications for the cryptocurrency industry as a whole.