The trial of Sam Bankman-Fried, the former head of the cryptocurrency exchange FTX, is set to begin this Tuesday. Bankman-Fried has been charged with violating the U.S. Securities Exchange Act. He is accused of failing to register FTX as a national securities exchange and also of failing to follow AML (Anti Money Laundering) procedures.
Bankman-Fried’s legal defense team is expected to argue that due to the rapid emergence of cryptocurrency as an asset class, the regulations governing exchanges should be reconsidered and updated to reflect the current market. They will likely point to the numerous developments in the crypto industry since 2017 when the exchange was founded.
The trial is expected to spark debate over how to regulate the burgeoning cryptocurrency market. This trial will likely set precedent for how U.S. courts view cryptocurrency regulation in the future. The legal outcome could have an effect on the shape of the cryptocurrency industry in years to come.
The prosecution is seeking a two year jail sentence, a fine, and the payment of restitution to those affected by the alleged violations. The result of this trial could be a sign of things to come in regards to the regulation of cryptocurrency exchanges.
Cryptocurrency investors will be keeping a close eye on this trial to see the outcome and to gain insight into how U.S. courts will view the regulation of cryptocurrency exchanges going forward. The trial is expected to be watched closely by other cryptocurrency exchanges and by the greater crypto market.