FTX founder Sam Bankman-Fried arrived for the first day of his criminal trial with a new haircut. What he heard first from some prospective jurors were familiar stories about how their crypto investments went bad.
At least five potential jurors said Tuesday that they, their company, or their close relatives invested in crypto, and all said those bets produced losses. One said her employer invested in FTX and Alameda Research, a hedge fund also once controlled by Bankman-Fried.
"Did your company make or lose money in these investments," Judge Lewis Kaplan asked. "Lose money," the prospective juror said.
Another said a crypto investment "financially ruined" his twin brother and "to be perfectly honest, I don’t know if I could separate that."
The crypto commentary from the jury pool was an early reminder of the public-perception challenges facing the 31-year-old entrepreneur as he tries to defend himself against charges that he embezzled billions in FTX customer funds, committed money laundering, and misled investors and lenders.
The collapse of his cryptocurrency exchange almost a year ago helped accelerate a pullback in the value of many digital assets, burning investors that had piled into the industry during the pandemic.
On Wednesday the judge expects to narrow a pool of 50 potential jurors to the 12 men and women (along with six alternates) who will determine if the FTX founder is innocent or guilty of crimes connected to the largest crypto collapse in US history.
Bankman-Fried, who arrived for court Tuesday dressed in a gray suit and a trimmer haircut that did away with his traditional mop-top look, has pleaded not guilty to the seven felony counts in this case. He potentially faces six additional criminal counts to be handled in a separate trial.
Judge Kaplan, who oversees the trial that started Tuesday, tried to simplify the proceedings for jurors: He said Bankman-Fried is accused of defrauding people who bought and sold cryptocurrency products on FTX’s exchanges.
Those transactions, the judge said, happened "kind of in the way that people can buy and sell stocks on the New York Stock Exchange."
The question, he said, was whether they could remain impartial "whatever you think about crypto."
He also spoke directly to the defendant and informed Bankman-Fried of his right to testify in his own defense. The judge said that the decision was solely Bankman-Fried’s to make and not that of his attorneys.
"It’s your call," Judge Kaplan said. "You could decide to testify against their advice or not testify against their advice."
"Do we understand each other on this?" Kaplan asked Bankman-Fried.
"Yes," Bankman-Fried replied to the judge.
Bankman-Fried was first arrested and charged last December and initially permitted on bail to remain out of custody. After Judge Kaplan determined he had engaged in witness tampering, he was ordered to wait out his trial in a Brooklyn administrative jail. He has been in that jail since August.
Prosecutors said Tuesday that the defendant was not offered a plea deal before the trial began.
On the first day of his trial, as roughly 50 prospective jurors were seated in the courtroom for questioning and approximately 50 more waited in an overflow room, Bankman-Fried was asked to stand up and face the candidates. The prospective jurors were asked if any had a connection to the defendant.
Some said they had read news stories and listened to podcasts about FTX and its collapse. One member of the pool recalled listening to Joe Rogan’s podcast and referred to Rogan as someone who had studied the matter.
The final jurors, who are paid $50 to $60 per day and receive travel reimbursement to and from the courthouse, will have no access to cell phones during the trial, are prohibited from researching information concerning the case, and may not read news coverage.
"You can satisfy your curiosity when it’s all over," Judge Kaplan said.
The trial is expected to last six weeks. Judge Kaplan told the prospective jurors opening statements and witness testimony would begin Wednesday.
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Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.