Theft or Mistakes? Bankman-Fried Jurors Hear Competing Explanations for FTX Collapse

Sam Bankman-Fried watches as his defense lawyer Mark Cohen makes his opening remark in Bankman-Fried's fraud trial over the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Court in New York City, on Oct. 4, 2023 in this courtroom sketch. Jane Rosenberg/Reuters

NEW YORK—Sam Bankman-Fried’s lawyers and federal prosecutors clashed on Wednesday in opening statements over whether the former billionaire’s FTX cryptocurrency exchange collapsed due to “massive” fraud by its founder or errors in business judgment.

Mr. Bankman-Fried, 31, has pleaded not guilty to charges he used FTX customer money from the exchange’s 2019 launch until its November 2022 bankruptcy in order to prop up his hedge fund, Alameda Research, buy luxury real estate, and donate to U.S. political campaigns and candidates.