FTX founder faces a new criminal trial in connection with the fall of his crypto business in March
FTX founder, Sam Bankman Fried found guilty of FTX crypto fraud Charges related to the fallout of his bankrupt cryptocurrency exchange in the initial of two criminal trials brought against his former chief executive.
The FTX founder was found guilty of seven charges of conspiracy and fraud in what the prosecutors described as “one of the largest fraudulent financial transactions” that has occurred in U.S. history.
A New York jury in Manhattan federal court sided with investigators that Bankman-Fried cheated customers, investors as well and lenders as a result of the fall of his crypto-business empire.
Prosecutors accused Bankman Fried who established and controlled both FTX and its sister hedge fund Alameda research, of misappropriating and stealing billions of dollars from FTX customers’ deposits plotting to deceive investors, and instructing other executives in his firms to follow suit.
Former crypto entrepreneur Sam Bankman-Fried facing 110 years in jail
At trial, the defendant was facing seven charges, including two counts of wire fraud as well as five conspiracy charges. The total of the charges amounts to a maximum penalty of 110 years in jail. A judge named Lewis Kaplan, who presided on the trial, scheduled an appointment for a sentencing hearing on the morning of the 28th of March.
Bankman-Fried’s lawyer Mark Cohen said in a statement shortly after the conviction was revealed that the defense is “very unhappy with the verdict” and stated that they would likely appeal the decision, adding that “Mr. Bankman-Fried is adamant that he is innocent and plans to be adamant in fighting the charges against the defendant.”
FTX And Sam Bankman-Fried’s Fraud Trial
“Sam Bankman-Fried committed one of the largest fraudulent financial transactions that has occurred in American past history.” U.S. Attorney for the Southern District of New York Damian Williams said after the verdict was made public. “The cryptocurrency industry could be brand new. The players, like Sam-Bankman Fried, could be relatively innovative. However, this type of corruption is as old as the time.”
A number of members of Bankman-Fried’s circle of friends were present at the trial. The prosecution’s main witnesses included Caroline Ellison –Bankman-Fried’s ex-girlfriend and ex-CEO of Alameda Research – as well as FTX co-founder Gary Wang and former FTX chief engineer Nishad Singh. The trio had previously admitted guilt and agreed to cooperate with the federal government.
Bankman-Fried also testified for his own defense in which he acknowledged making mistakes but insisted that there was no fraud or taking money from anyone.
The FTX founder took advantage of the rise of cryptocurrency and digital currency, accumulating an estimated value of $26 billion. He became a powerful donor to philanthropy and politics before FTX was declared bankrupt in November 2022.
The cryptocurrency exchange was wiped out after news that FTX had combined assets with Alameda which triggered floods of customers to take out funds. Bankman-Fried was charged the next month.
In addition to conspiracy and fraud charges, Bankman-Fried is also accused of breaking campaign finance laws through the use of FTX customer funds to fund billions of dollars in political donations via an illegal straw-donor scam, and also for being accused of bribing Chinese officials.
The second trial for criminals against Bankman-Fried is scheduled to start on March 20, 2024. He has pleaded in a plea of guilty to the charges against him.