FTX founder Sam Bankman-Fried was found guilty of seven charges related to fraud and money laundering following a month-long trial in New York.
The Manhattan federal court jury delivered its verdict after less than five hours of deliberation, marking a dramatic downfall for the 31-year-old former billionaire and a prominent figure in the crypto industry.
Bankman-Fried’s legal troubles began after the collapse of his cryptocurrency exchange, FTX, last year, leading to his arrest.
He now faces the possibility of serving several decades in prison, with his sentencing scheduled for 28 March 2024.
The prosecution described his actions as “one of the biggest financial frauds in American history.”
Bankman-Fried faced seven counts of fraud and money laundering, with prosecutors alleging he defrauded FTX users of $8bn, but he maintained his innocence throughout the trial, acknowledging mistakes but asserting that he had acted in good faith.
His defence lawyer expressed disappointment with the verdict and indicated that Bankman-Fried would vigorously continue to contest the charges.
Three former close associates, including his ex-girlfriend Caroline Ellison, pleaded guilty and agreed to testify against him in the hope of receiving more lenient sentences.
The prosecution presented evidence suggesting that Bankman-Fried’s trading firm, Alameda Research, received customer deposits on behalf of FTX when traditional banks were reluctant to provide banking services.
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Instead of protecting these funds as promised publicly, he diverted the money to repay lenders, acquire assets, and make various investments and political contributions.
Bankman-Fried faces a potential maximum sentence of 110 years, though it is unlikely that the judge will impose the full term.
The collapse of FTX left many customers unable to recover their funds, but lawyers working on the bankruptcy case have reported recovering most of the missing funds.
The trial drew significant attention due to its potential impact on the broader cryptocurrency industry, which has been under intense regulatory scrutiny.
Bankman-Fried was once known as the “king of crypto” for the rapid growth of FTX and his influential role in the sector.
In July 2023, the US government passed a landmark crypto bill. The new bill, which was passed by the House Financial Services Committee on 26 July, aims to grow the allowed oversight of the Commodity Futures Trading Commission (CFTC), as well as make it clear where the Securities and Exchange Commission’s (SEC) oversight begins and ends.
Elsewhere, the UK is also set to implement its first-ever set of regulations to oversee the cryptocurrency sector, with a focus on consumer protection and financial stability.