Inside Crypto’s Trial of the Century

5 Min Read By: Jess Cheng, Megan Lindgren

In a Fireside Chat event on April 2, 2024, sponsored by the Uniform Commercial Code Committee of the ABA Business Law Section (UCC Committee) and organized by the Committee’s Tokenized Payments Instrument Task Force, Assistant U.S. Attorney for the Southern District of New York Thane Rehn shared reflections on and lessons learned from the high-profile trial of Sam Bankman-Fried (SBF), founder of crypto exchange FTX Trading Ltd. (FTX). In a discussion moderated by Jess Cheng, partner at Wilson Sonsini, Rehn provided insight into the investigation of FTX’s collapse, the prosecution’s trial strategy, and key facets of the case that enabled the prosecution team to move quickly. The event, which attracted news coverage,[1] was especially timely, as it occurred only five days after SBF was sentenced to twenty-five years in prison for misappropriating billions of dollars of customer funds and defrauding investors and lenders.

Timeline of the Fall of FTX and SBF Trial

The chain of events that led to FTX’s collapse began in early November 2022 with the leak of what purported to be a balance sheet of Alameda Research LLC (Alameda), a crypto trading firm and FTX affiliate. Among other things, the leaked document revealed that a significant portion of Alameda’s assets consisted of FTT, an illiquid exchange token issued by FTX. Within days, rival crypto exchange announced it would sell off its FTT holdings and initially offered to acquire FTX, but shortly thereafter, it withdrew from the deal, citing reports of mishandling of customer funds and alleged federal investigations. On November 11, 2022, FTX filed for Chapter 11 bankruptcy protection.

On December 12, 2022, SBF was arrested in the Bahamas, and the following day, the U.S. Attorney’s Office for the Southern District of New York unsealed the indictment charging him with wire fraud, commodities fraud, securities fraud, and money laundering. In parallel, the Securities and Exchange Commission charged SBF with orchestrating a scheme to defraud equity investors in FTX in violation of federal securities laws, and the Commodity Futures Trading Commission charged SBF, FTX, and Alameda with fraud and material misrepresentations in violation of federal commodities laws.

On November 2, 2023, after about one month of trial proceedings, the jury found SBF guilty on all seven counts of fraud and conspiracy. The U.S. Department of Justice issued the following statement from Attorney General Merrick B. Garland on the guilty verdict:

Sam Bankman-Fried thought that he was above the law. Today’s verdict proves he was wrong. This case should send a clear message to anyone who tries to hide their crimes behind a shiny new thing they claim no one else is smart enough to understand: the Justice Department will hold you accountable. I am grateful to the U.S. Attorney’s Office for the Southern District of New York and the FBI for their outstanding work in bringing Mr. Bankman-Fried to justice.

On March 28, 2024, U.S. District Court Judge Lewis Kaplan sentenced SBF to twenty-five years in prison and three years of supervised release, and he ordered the defendant to pay $11 billion in forfeiture for his orchestration of multiple fraudulent schemes.

Reflections on and Lessons Learned from the Trial

During the UCC Committee event on April 2, Rehn provided key insights into the trial strategy based on his experience as part of the prosecuting team, including preparing for the trial, delivering the prosecution’s opening statements, and cross-examining witnesses.

Sharing colorful examples and compelling visuals used at trial, Rehn illustrated how cooperating witnesses played an important role in the trial and efforts leading up to it. He discussed how the specialized knowledge of certain members of SBF’s inner circle at FTX and Alameda helped prosecutors piece together the billion-dollar theft of customer funds and the fraud on investors and lenders, enabling the team to move quickly to trial.

Rehn also shared how he used the opening statements to help the jury understand the narrative of FTX’s collapse, explain core financial and crypto concepts, and more generally preview the structure of the prosecution’s arguments. Interestingly, the aspects of crypto that tend to be more challenging to grasp—namely, blockchain, distributed ledgers, and technological innovation—arose less often than one might expect. Rather, the focus tended to be on explaining FTX’s role as a crypto exchange and dispelling misconceptions about its fall, particularly in the context of a highly volatile crypto market.

The defense sought to argue that SBF acted in good faith and that FTX was “building the plane as they were flying it,” with SBF taking the stand during his trial. Rehn walked through how the wealth of SBF’s tweets, interviews, and other public statements belied his testimony and those arguments. Sharing anecdotes, Rehn discussed the prosecution team’s approach to illustrating how SBF’s statements under cross-examination directly contradicted his prior statements, such as his claims to investors and the public that FTX segregated customer funds.


The Fireside Chat was a unique opportunity to learn about the strategies behind and lessons from a high-profile trial, directly from a key member of the prosecution team. Although the fraud occurred in the context of an innovative and volatile industry, at its core the case is a reminder across all industries that there are serious consequences for defrauding customers, investors, and lenders.

The views expressed by the writers are the writers’ own and do not necessarily reflect those of the Federal Reserve Bank of New York or the Federal Reserve System, nor the views of Wilson Sonsini Goodrich & Rosati.

  1. Luc Cohen, “Sam Bankman-Fried prosecutor says coder’s cooperation sped up case,” Reuters, April 2, 2024.


By: Jess Cheng, Megan Lindgren


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