The founder of the now-defunct cryptocurrency exchange FTX, Sam Bankman-Fried, has been found guilty of defrauding his customers, as determined by a jury on Thursday. This verdict came swiftly, with the jury needing only a half-day of deliberations to reach their decision.
At the age of 31, the billionaire was facing a slew of seven charges, two for fraud and five for conspiracy, all of which he was found guilty of. The trial, commencing in early October, showcased prosecutors accusing Bankman-Fried of purloining a staggering amount of 8 billion dollars (over 7.5 billion euros) from his customers, thus earmarking this case as one of the largest financial frauds in history.
Bankman-Fried had allegedly rerouted funds from FTX customers to his investment fund Alameda Research, engaging in high-risk investments thereafter. This action left customers in a lurch, unable to access their funds, which eventually led to FTX’s bankruptcy. During the trial, a number of friends and colleagues took the stand, testifying that Bankman-Fried had personally orchestrated the misleading of his customers.
Bankruptcy for Sam Bankman-Fried
In the courtroom, the former magnate acknowledged making errors in the lead-up to FTX’s bankruptcy but vehemently denied having stolen from his customers. He contended that he believed it was lawful for Alameda to “borrow” money from FTX, and was oblivious to the enormity of the debt until both companies plummeted into bankruptcy. He maintained that his legal team was fully cognizant of the transactions wherein FTX customer funds were channeled into an Alameda bank account.
The repercussions for the fraud and conspiracy charges, which Bankman-Fried has been found guilty of, are severe, with the maximum penalty being 110 years behind bars. The precise length of his sentence will be ascertained in a session slated for March 28, 2024. Shortly after the verdict was delivered on Thursday, Bankman-Fried conveyed his intent to challenge the conviction.
Furthermore, following the verdict, Bankman-Fried was arrested in The Bahamas, facing charges of securities fraud, wire fraud, and money laundering. His extradition to the US is anticipated in the coming weeks to face the charges leveled against him. Despite his pleas, a judge denied him bail, remanding him to the Bahamas Department of Correction. The trial, held in New York, delved into the disappearance of billions of dollars from his customers’ accounts on the cryptocurrency exchange he established four years ago.