Cryptocurrency- A former Watergate prosecutor thinks Sam Bankman-Fried should avoid a trial and cut a deal.
- Nick Akerman told Yahoo Finance that an acquittal at a trial is "virtually impossible."
A former Watergate prosecutor, Nick Akerman, suggested that Sam Bankman-Fried should avoid a trial and push for a plea deal because the FTX founder has almost no chance of getting acquitted by a jury in a trial.
In an interview with Yahoo Finance on Thursday, Akerman pointed to the fact that Caroline Ellison, the former CEO of Alameda Research, and Gary Wang, an FTX cofounder, have agreed to plea deals and are cooperating with prosecutors.
"It's going to be very tough, if not impossible, for him to go to trial on these charges," said Akerman, who also served as an assistant US attorney in the Southern District of New York. "It seems to me that when you have two insiders that were that close to him basically laying out the scheme, it is almost virtually impossible to ever think that he could be acquitted by a jury."
Bankman-Fried was arrested earlier this month in the Bahamas and has been extradited to the US, where he faces federal charges of defrauding investors. He was released on $250 million bail on Thursday and will stay with his parents in Palo Alto, California.
Akerman suggested Bankman-Fried could help his case and get a lesser sentence by going before the court to show some remorse and take some responsibility for the FTX debacle.
"If I were his lawyer, I would basically advise him to cut his losses, take a plea, and make the best possible deal he could," he said.
FTX collapsed as it faced a shortfall of billions of dollars between its liabilities and assets amid reports that it had transferred client funds to Alameda.
Bankman-Fried has said he wasn't aware of what was going on and "didn't knowingly commingle funds" between Alameda and FTX. The Securities and Exchange Commission's complaint said he often directed Ellison to manipulate or misstate the trading firm's financial position.
While crypto is a relatively new asset class, Akerman suggested the case is straightforward under existing law. He described the collapse of FTX as essentially an "old traditional fraud" that involved misleading people, taking their money, and moving it around "like it was one big slush fund."
"There is nothing unusual about this fraud," he added. "I mean, this is a pretty classic fraud that is perpetrated and has been perpetrated for years. And the fact that it's a new asset class really doesn't make a bit of difference."