The long-awaited trial against FTX crypto exchange founder, Sam Bankman-Fried, opened on Tuesday in New York. The 31-year-old is accused of fraud and money laundering in a particularly severe case.

Bankman-Fried, once considered a star of the crypto scene, is indicted on seven counts and must answer to a jury.

The severity of the charges is immense: The prosecution accuses Bankman-Fried of embezzling client funds to offset trading losses at his crypto hedge fund Alameda Research. In addition, he is accused of conducting transactions to conceal the misuse of customer funds.

The indictment includes fraud and money laundering through the embezzlement of customer funds.

The crypto scene was shocked when it became known last November that FTX had to file for bankruptcy. A good eight billion dollars in customer funds had disappeared, and customers worldwide no longer had access to their money. Before the bankruptcy, FTX had counted over nine million customer accounts and was considered the second largest crypto exchange in the world.

The situation was dramatic for Bankman-Fried, once hailed as a "crypto prodigy". He showed remorse early on and admitted that he had lost his grounding. Shortly before his arrest in the Bahamas in December, he confessed to Handelsblatt: "I will have to pay for it."

The investigation by the Public Prosecutor's Office has revealed that Bankman-Fried embezzled client funds to finance the expenses and debts of his other business. Among the key witnesses who will testify against Bankman-Fried are former employees and close associates. They have already made deals with the public prosecutor's office and are set to receive a lighter sentence in exchange for their information.

According to experts, the collected evidence suggests that the facts do not look good for Bankman-Fried.

The case reminds of the large fraud scandal involving billionaire Bernie Madoff, who has been in a Brooklyn prison since August. However, Bankman-Fried has not pleaded guilty. If he is found guilty on all seven counts, he faces more than 100 years in prison. Legal experts, however, assume that not all charges are usually taken into account for the sentence and estimate a prison term of 20 to 30 years to be more realistic.

However, Bankman-Fried's chances are worsening due to the statements of his former employees and the incriminating evidence.

In Europe, FTX customers are still awaiting a payout of their money. However, while the company's subsidiaries in Japan have already been fully compensated, customers in Europe are likely to wait until 2024.

Currently, customer claims are being traded at a discount of 63 percent, which means they would only receive 37 cents back for every dollar if they sell their claims now. According to Markus Thielen, head of research at the crypto firm Matrixport in Singapore, this is a promising development for FTX creditors.

John Ray, the bankruptcy administrator of FTX, has already made progress and tracked down both cryptocurrencies and cash assets and real estate worth a total of 7.3 billion dollars. Since September 2021, Ray is also the CEO of FTX with the goal to locate and liquidate as many assets as possible to compensate the clients.

The rising crypto prices could help former FTX customers recover a larger portion of their assets. The largest and oldest cryptocurrency, Bitcoin, has increased by 67 percent since the beginning of the year and was last quoted at 27,751 dollars.