Sam Bankman-Fried case: The FTX criminal fraud trial begins this week. Here's everything you need to know.

• Sam Bankman-Fried's criminal fraud trial begins in federal court on Tuesday.
• Prosecutors say he manipulated funds to defraud depositors and investors of FTX, his collapsed crypto exchange.
• SBF has said he could have rescued the company — and may make his case on the witness stand.

Former crypto billionaire Sam Bankman-Fried is set to face the music on Tuesday.

Jury selection is scheduled to begin in a federal court in downtown Manhattan for his criminal trial on charges that he defrauded customers of FTX, the once-powerful and now-defunct cryptocurrency exchange he once led.

According to prosecutors, Bankman-Fried commingled funds between FTX, where he was CEO, and Alameda Research, a hedge fund he also controlled. Once the fishy financials became public late last year, customers and investors rushed to take their money out of the failing exchange and FTX's proprietary cryptocurrency token lost much of its value.

The downfall of FTX also arguably marked the final nail in the coffin, for much of America, of the possibility that cryptocurrency could be a legitimate financial instrument.

To many, FTX was seen as a crypto firm that was operating by the book, as evidenced by its ties to celebrity spokespeople and legitimate financial institutions. Bankman-Fried had worked hard and spent tens of millions of dollars to cozy up to politicians and try to shape crypto regulation.

At its peak, FTX was valued at $32 billion, backed by elite venture capital firms, had the naming rights to the Miami Heat's basketball stadium, and ran flashy commercials featuring the likes of Tom Brady, Gisele Bündchen, Stephen Curry, Naomi Osaka, Larry David, and Kevin O'Leary of "Shark Tank."

Bankman-Fried, now 31 years old, had earned a three-letter nickname: SBF.

For his part, the ex-mogul pleaded not guilty to all the charges against him and has argued that prosecutors and the corporate suits who took over FTX after its crash misunderstood what he was doing. With more time, he claims, he could have gotten things under control and made everyone whole.

In media interviews and a Substack post, he has said that he didn't understand the degree to which funds between FTX and Alameda Research were intermingled, shifting blame to Caroline Ellison, the former CEO of Alameda Research and his on-and-off ex-girlfriend.

He's also expected to make his case to the public through "Going Infinite: The Rise and Fall of a New Tycoon," the new book by Michael Lewis, which is scheduled to be released on October 3, the same day the trial begins.

Bankman-Fried's jail conditions have made trial prep harder

In his first court appearance in Manhattan following his arrest, a judge allowed SBF to remain out of jail on the condition that he stay with his parents in their home in Palo Alto, California, except for court appearances in New York, among other requirements.

If he violated those conditions, he and his family — and two bail guarantors who were secret until Insider and other media organizations fought for their disclosure — would be on the hook for $250 million.

US District Judge Lewis Kaplan, who is overseeing the criminal case and set SBF's bail conditions, issued more restrictions as the defendant toed the line of his conditions of release. Earlier this year, he used messaging apps with auto-deleting and encrypted text features. He also installed a VPN, supposedly to watch football games.

In August, Kaplan ruled that Bankman-Fried had finally gone too far. He jailed Bankman-Fried after prosecutors accused him of witness tampering when he leaked diary entries from Ellison to The New York Times. Kaplan said Bankman-Fried twice tried to sway potential jurors: once with the diary entries and again when he messaged FTX's general counsel on an encrypted messaging app.

Since being remanded to Brooklyn's Metropolitan Detention Center, which is notorious for its poor conditions for inmates, Bankman-Fried's attorneys have argued that the detention center hasn't honored Bankman-Fried's vegan diet, forcing him to live off of bread, water, and peanut butter.

In September, his attorneys said in court filings that he doesn't have sufficient internet access to prepare for his case. Twice a week, he is permitted to leave the detention center for a Manhattan courthouse, where he is allotted a laptop and five hours to review case information. His attorneys have argued the internet isn't good enough, nor is the battery on the laptop.

Bankman-Fried faces seven criminal charges at the trial — and is set to have a second trial next year

Federal prosecutors in the US Attorney's Office for the Southern District in New York initially brought eight criminal counts against Bankman-Fried in December, mostly for fraud and conspiracy to commit money laundering.

The crypto mogul agreed to be extradited from the Bahamas, where he was arrested and where he ran FTX out of a mansion lived in with other employees.

In the months since, prosecutors have brought several superseding indictments, slapping on more criminal charges.

According to the most recent indictment, prosecutors aim to prove Bankman-Fried committed seven counts in total, for alleged crimes that include wire fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering.

Jury selection for Bankman-Fried's trial on those seven counts is scheduled to begin on Tuesday, October 3. The attorneys in the case have indicated in court filings that they expect it to last less than a day, with opening statements starting that afternoon or Wednesday morning. The trial is expected to last five weeks overall.

In February, prosecutors had brought an indictment alleging that Bankman-Fried also broke campaign finance laws by funneling political donations through two other FTX executives. His aim, prosecutors wrote in the filing, was "to improve his personal standing in Washington, D.C., increase FTX's profile, and curry favor with candidates that could help pass legislation favorable to FTX or Bankman-Fried's personal agenda, including legislation concerning regulatory oversight over FTX and its industry."

Bankman-Fried's lawyers objected to the charges, arguing that they aren't covered by the extradition treaty between the Bahamas and the US. It was unfair, they said, for him to be extradited on one set of charges and then be handed another set of charges, not included in the treaty, once he landed on American soil.

Prosecutors have asked the Bahamian government for a waiver to allow them to bring the charges anyway.

While the Bahamian courts sort out the issue, Kaplan set aside five counts related to the campaign finance allegations to be tried in a separate trial, tentatively scheduled for March 11 next year. Prosecutors have since dropped one of them.

Even though the charges over political donations are off-limits for now, prosecutors said they still plan to bring evidence related to them in order to try to prove other charges in the trial.

Lawyers on all sides of the case are powerhouses

For his defense, Bankman-Fried has hired Mark S. Cohen, a skilled white-collar criminal lawyer who previously worked as a federal prosecutor. He's joined by Christian Everdell, who was part of the prosecution team in Joaquín "El Chapo" Guzmán's criminal case, and who as a defense lawyer previously represented Ghislaine Maxwell during her sex trafficking trial. (A jury voted to convict Maxwell, who is serving a 20-year prison sentence.)

Eight prosecutors have been assigned to the case. They're led by Danielle Sassoon, a former US Supreme Court law clerk, and Nicholas Roos, who's also prosecuting the insider trading case against billionaire Joe Lewis.

Kaplan, the presiding judge in Bankman-Fried's trial, is no stranger to high-profile cases.

Earlier this year, he oversaw the civil sexual abuse and defamation trial from E. Jean Carroll against former President Donald Trump (a jury voted in Carroll's favor and said Trump owed her $5 million in damages) and is set to oversee a second trial over similar claims in January. Appointed by former President Bill Clinton, Kaplan has overseen cases related to environmental disasters, the Gambino crime family, Guantanamo Bay detainees, and rape accusations against Prince Andrew.

In addition to the criminal case against Bankman-Fried, the fallout of FTX's collapse has created a fountain of complicated lawsuits and legal maneuvers. Investors and depositors have tried to claw back as much money as possible, and lawyers are racking up upwards of $100 million in billable hours as they clean up the mess.

The Securities and Exchange Commission has a civil case against Bankman-Fried alleging he "orchestrated a massive, years-long fraud." Another lawsuit accuses SBF's parents — the prominent Stanford University professors Joseph Bankman and Barbara Fried — of siphoning millions of dollars from FTX.

Lawyers representing FTX debtors in its bankruptcy case have been attending pre-trial hearings, watching them like hawks and keen to absorb as much information as possible. They're likely to pay attention to the evidence prosecutors bring forth in the trial, which may help identify hidden pockets of funds and could shape future litigation.

Bankman-Fried may take the stand

Prosecutors will make their case first. Ellison, who pleaded guilty to fraud charges in December and began cooperating with investigators, is set to be the star witness of the trial.

FTX cofounder Gary Wang — who prosecutors say engineered the code that allowed money to secretly flow between FTX and Alameda Research — and Nishad Singh — the former head of engineering at FTX and Alameda, who prosecutors say funneled illegal political donations — also pleaded guilty to several counts of fraud and conspiracy charges and are cooperating with prosecutors.

A fourth FTX executive, Ryan Salame, pleaded guilty to fraud and campaign finance charges in September, but does not appear to be cooperating with prosecutors.

In the US criminal justice system, where defendants are considered innocent until proven guilty, prosecutors have the burden of proof. Good defense lawyers generally spend their efforts trying to poke holes in the case, rather than allow their clients to take the witness stand and put forward a different version of events.

But, so far, Bankman-Fried has appeared willing to flout his own lawyers' advice. During one of the hearings following his client's leak of Ellison's diary entries, Cohen wearily told the judge that Bankman-Fried's strategy to curry favor with the press — even if it was protected by the First Amendment and should keep him out of jail — was not good.

"That might be a good strategy, that might be a bad strategy," Cohen said in the July hearing. "Given the fact that the stories about him continue to be negative, I suggest it would be a bad strategy."

Given Bankman-Fried's eagerness to make his case to the public as well as the jury, there's a good chance he'll choose to take the stand to tell his version of the story.