Sam Bankman-Fried, the founder of the now-bankrupt crypto exchange FTX, has been found guilty on all counts of defrauding his customers. The verdict was delivered on Thursday in Manhattan federal court.
In a dramatic courtroom moment, the once prominent mogul stood before the jury, his hands clasped together, as the verdict was delivered. He was found guilty on seven counts of wire fraud and conspiracy to launder money.
Crpto King Sam Bankman-Fried Convicted of Defrauding Clients
In a sentencing hearing scheduled for March 28, 2024, US District Judge Lewis Kaplan has set the stage for a potentially lengthy prison term for the individual in question. In a swift conclusion to weeks of courtroom proceedings, the jury reached a verdict after a mere four hours of deliberation.
Throughout the trial, compelling testimonies were heard from both the accused's closest allies and the disgraced entrepreneur himself. In a steadfast display of conviction, he maintained his innocence until the very end.
Sam Bankman-Fried's journey to notoriety started humbly in the Bay Area, where his parents were law professors at Stanford Law School.
After graduating with a physics degree from MIT, he joined Jane Street Capital, where he began donating half of his income to charitable causes, adhering to the principles of "effective altruism." In 2017, he founded Alameda Research, a cryptocurrency trading firm, at 25.
Known for his unassuming attire, perpetual shorts and sneakers, and his somewhat awkward demeanor, Bankman-Fried managed to befriend political leaders, presidents, and even pop stars.
His profile soared as he championed the cryptocurrency industry in Washington, DC, lobbying for regulatory reforms and striving to make a positive impact on the world.
Despite amassing immense wealth, with an estimated net worth of $21.2 billion, he continued to live a relatively frugal lifestyle, making substantial philanthropic contributions and pledging to donate his entire fortune to charity.
Bankman-Fried's fortunes continued to rise as he founded the FTX trading platform in 2019, marketed as a trusted and straightforward exchange.
The platform capitalized on transaction fees, and when the value of Bitcoin skyrocketed in 2021, FTX became one of the world's largest cryptocurrency traders, estimated to be worth $32 billion.
However, cracks began to appear in Bankman-Fried's empire in November 2022 when's leaked balance sheet from Coindesk exposed the unusually close relationship between Alameda and FTX.
The revelation sent shockwaves through the crypto industry, leading to a massive withdrawal of funds by FTX customers and an $8 billion deficit in FTX's accounts. Bankman-Fried's wealth plummeted by an estimated $16 billion in a single day.
FTX filed for bankruptcy shortly after that, and Bankman-Fried resigned as CEO.
He was arrested in the Bahamas on December 12, 2022, setting off a chain reaction that caused several exchanges to implode and cryptocurrency prices to plummet, according to The Independent.
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Massive Conspiracy Allegations in Sam Bankman-Fried's Trial
Prosecutors accused him of orchestrating a wide-scale conspiracy to defraud FTX investors and the Alameda Research hedge fund exchange.
In a trial that lasted a month, prosecutors alleged that Bankman-Fried had used billions of dollars of customer funds for his personal use and made millions of dollars in political contributions to federal political candidates and committees.
They argued that he concealed the close ties between Alameda and FTX from investors while using customer funds for undisclosed investments, real estate purchases, and political donations.
On November 2, 2023, a federal jury found Sam Bankman-Fried guilty of defrauding customers on his cryptocurrency exchange, convicting him on two counts of fraud and five counts of conspiracy.
The verdict came after just four hours of deliberation, and he potentially faces a sentence of over a century in prison. Judge Lewis A. Kaplan set his sentencing for March 28, 2024. As the verdict was read aloud, Bankman-Fried appeared shell-shocked and sat motionless, reflecting on the dramatic turn of events.
In a statement following the ruling, his lawyer, Mark Cohen, maintained his client's innocence and vowed to continue fighting the charges. Meanwhile, US Attorney Damian Williams emphasized the severity of the crimes, labeling them as one of the most significant financial frauds in
The rise and fall of Sam Bankman-Fried serves as a cautionary tale in the ever-evolving world of cryptocurrency. While he was celebrated for his philanthropic beliefs and achievements, his downfall underscores the importance of accountability and transparency in the crypto industry.
As this case concludes, it highlights the need for vigilance in the rapidly growing and often volatile world of digital finance, Axios reported.
