FTX founder Sam Bankman-Fried found guilty of all charges in ‘one of the biggest financial frauds in American history’

In an industry known for fraud and excess, Bankman-Fried has blazed a trail spectacular path, including a meteoric rise that saw FTX valued at $32 billion after just a few years of operation. After a rush on customer deposits revealed last November a huge hole at the center of its business, FTX declared bankruptcy, with Bankman-Fried stopped few weeks later.

The Justice Department indicted him on seven counts, including wire fraud, securities fraud and money laundering, alleging that he misappropriated approximately $8 billion in client assets to its own purposes, including luxury real estate at the company’s headquarters in the Bahamas, at risk. risky investments and transactions.

After a month-long trial, the jury needed less than five hours to decide he was guilty of all charges. Such quick verdicts in high-stakes white-collar cases are not the norm.

“Sam Bankman-Fried perpetrated one of the largest financial frauds in American history: a multibillion-dollar scheme designed to make him the crypto king,” the U.S. Attorney said. Damien Williams said during a press conference Thursday evening. “But here’s the thing: the cryptocurrency industry may be new, actors like Sam Bankman-Fried may be new, but this type of fraud, this type of corruption is as old as time. And we have no patience for that.

The king of crypto

During the crypto bull run of 2021 and 2022, Bankman-Fried was everywhere. Billboards to Super Bowl commercialshe assured potential FTX users that the exchange was a safe place to trade digital assets like Bitcoin.

The stunning collapse of FTX turned Bankman-Fried’s criminal proceedings into a circus. Even his bail conditions turned out to be dramatic, according to Judge Lewis Kaplan in pre-trial detention the founder of crypto at one Brooklyn Detention Center after his escape private writings from Caroline Ellison, his then-girlfriend and CEO of FTX’s trading company, Alameda Research, to New York Times.

The trial began in early October, with DOJ prosecutors presenting a series of witnesses, including members of its inner circle who testified that he had led them has fly billions of dollars of customer assets for their own needs.

After the prosecution completed its case, Bankman-Fried made the unusual decision to testify – a right that defendants typically waive to avoid self-incrimination. During three days of cross-examination, including one without the presence of the jury, prosecutors drilled holes In Bankman-Fried’s story, he was acting in good faith, with the crypto founder frequently pleading ignorance of what was happening in his own company.

“Maintains his innocence”

After a little more than four hours of deliberations, the jury told Kaplan Friday that it had reached its verdict: Bankman-Fried was guilty. He could spend decades behind bars.

Sentencing is set for March 28. Bankman-Fried also faces a second criminal trial scheduled for March 2024 on additional charges that were cut due to complications related to his extradition agreement with the Bahamas. One of the other counts includes alleged corruption from a Chinese official while Alameda was based in Hong Kong.

Bankman-Fried also has the option to appeal.

Mark Cohen, an attorney for Bankman-Fried, released the following statement following the decision: “We respect the jury’s decision. But we are very disappointed with the result. Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him.