FTX: What Sam Bankman-Fried's attorneys will likely argue in his defense

FTX founder Sam Bankman-Fried is staring at the prospect of spending decades behind bars if he is convicted on the slew of charges he faces in connection with the collapse of his crypto empire as prosecutors seek retribution for countless customers who lost billions of dollars when the platform crumbled.

So, what could his legal team possibly argue in making the case for his exoneration? One white-collar defense attorney says observers have already seen a glimpse of the likely arguments from Bankman-Fried himself.

Bankman-Fried, 30, was arrested last week on eight criminal counts ranging from wire fraud to money laundering to conspiracy to commit fraud. Federal authorities accuse the former CEO of diverting investors' money to cover expenses, debts and risky trades at his crypto hedge fund, Alameda Research, in addition to making lavish purchases and illegal campaign contributions without telling his customers.

But prosecutors have to be able to demonstrate that Bankman-Fried had an intent to commit fraud, according to Mark Kasten, a member of the Blockchain and Crypto Assets Practice group at law firm Buchanan Ingersoll & Rooney, who says the FTX founder's lawyers could argue that he wasn't criminal – he was just incompetent.

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"I think we have seen a preview of that in his public statements because he certainly forced the hands of his attorneys by going out there and essentially saying that he was out of his depth and he made mistakes and he didn't intend to defraud anyone," Kasten told FOX Business, pointing to Bankman-Fried's numerous press interviews and the written testimony he planned to deliver to Congress in person before his arrest in the Bahamas last week.

"But," Kasten noted, "that's probably the defense that they were going to use anyway."

He explained, "You know, you can run a business or you can run a hedge fund and lose money through mismanagement and incompetence – but that's not criminal in and of itself."

Kasten says Bankman-Fried could also claim that he was not aware of the alleged movement of funds from FTX to Alameda and that he did not have oversight because he had delegated those responsibilities to other members of leadership.

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So far, Bankman-Fried is the only FTX executive to be arrested in connection with its collapse. Kasten says the fact that he has been charged individually with conspiracy but no co-conspirators have been named is a signal that other members of FTX leadership have turned on the founder and are cooperating with the government to help build the case against him. 

Because of that, the lawyer says, observers can expect Bankman-Fried's attorneys to attack the credibility of those cooperating.

Unlike Bankman-Fried, other former leaders of FTX have made no public statements since the platform's downfall, including Caroline Ellison, the former CEO of Alameda who is an ex-girlfriend of Bankman-Fried's. FTX co-founder Gary Wang has also remained silent, and former FTX Digital co-CEO Ryan Salame purportedly pointed to other executives when he alerted Bahamian authorities to alleged improper payments to Alameda last month.

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Finally, Kasten says, while admitting that FTX was run sloppily, Bankman-Fried's attorneys could also point out that its growth was explosive in what is an unclear regulatory environment in a developing sector and that the company was immature but not criminal.

FOX Business' Louis Casiano contributed to this report.