Fintech's eyes are on the trial of FTX founder Sam Bankman-Fried, indicted on an array of fraud charges, which kicks off tomorrow in New York City.

Why it matters: If convicted, Bankman-Fried could become the biggest venture-backed fraudster, surpassing former Theranos CEO Elizabeth Holmes, Axios' Kia Kokalitcheva writes.

Flashback: Crypto exchange FTX skyrocketed to prominence amid the pandemic, becoming one of the largest by trading volume. At the height of its dominance, the platform attracted top investors and grew its valuation to $32 billion by January 2022.

• Then, by the first weekend of November 2022, it all quickly unraveled after a liquidity crunch revealed that customer funds were missing.
• By December, the exchange had filed for bankruptcy protection, Bankman-Fried had been arrested in the Bahamas and extradited to the U.S., and some of his former lieutenants had agreed to plea deals.

Catch up quick: Bankman-Fried faces seven counts, including wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, conspiracy to commit commodities fraud, and conspiracy to commit money laundering.

• Though prosecutors eventually dropped charges of election finance violations because of a mistake during extradition, they later re-added allegations that he had used stolen customer funds for illegal campaign contributions.
• Former FTX and Alameda Research executives Caroline Ellison, Gary Wang, Nishad Singh and Ryan Salame have pleaded guilty and are likely to testify against Bankman-Fried.

Between the lines: As was the case in Theranos' collapse, investors' due diligence is likely to come under scrutiny during the trial.

• Over a few short years, venture firms invested a total of $1.9 billion into FTX, and the company amassed a capped table that included some of Silicon Valley's most respected names.

Yes, but: Even the most successful venture firm in Silicon Valley claims it was conned.

• "What gets me is not that we made the investment, it's the year and a half of working relationship after the investment and I still didn't see it — and that's difficult," Sequoia Capital partner Alfred Lin saidin January, adding that the firm was "misled" by FTX.

The intrigue: If Bankman-Fried is convicted of defrauding FTX customers, he will stand apart from Holmes' trial. She was found guilty only of duping venture capitalists. (Theranos president Sunny Balwani was convicted of patient-related charges.)

• FTX customers (and critics) have been understandably vocal since the company collapsed, leaving many of them unable to withdraw the assets they had.

The bottom line: Even if Bankman-Fried is convicted of defrauding them, whether they get their money back is a separate question (and literally another legal proceeding). Even then, the damage has long been done.

• A spokesperson for Bankman-Fried declined to comment.