In the high-profile criminal trial of cryptocurrency magnate Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX and Alameda Research, Bankman Fried has been found guilty of all seven counts of charges. These charges include fraud, conspiracy, and money laundering, stemming from a scheme that defrauded customers of his crypto empire out of billions of dollars.
The verdict was delivered on Thursday night, with jurors determining that Bankman-Fried was guilty after four and a half hours of deliberation. The defendant could potentially face decades in prison, and the sentencing has been scheduled for March 28, 2024, per reports from Reuters and CoinDesk.
Bankman-Fried’s rapid descent from the upper echelons of the cryptocurrency world began with a faulty Alameda balance sheet exposed by CoinDesk in November 2022, leading to industry-wide panic and concerns about FTX’s liquidity.
A “Pyramid of Deceit”
The prosecution, led by US Assistant Attorney Danielle Sassoon, alleged that Bankman-Fried coordinated what they referred to as a “pyramid of deceit” against FTX customers, misappropriating over $10 billion in value without their consent.
FTX, once one of the world’s largest cryptocurrency exchanges, experienced a dramatic downfall, causing ripple effects across the cryptocurrency and financial sectors, including network bankruptcies and increased regulatory scrutiny.
The trial, which lasted five weeks, delved into the events leading up to the collapse of FTX and its associated trading company. The US Department of Justice had charged the 31-year-old defendant approximately 11 months ago.
The seven counts that could put Bankman-Fried away for a long time
In the criminal trial in the Southern District of New York, Bankman-Fried was charged with:
Counts 1 and 2: Wire fraud/conspiracy to commit wire fraud against FTX customers. Bankman-Fried was accused of defrauding customers by allowing Alameda to tap into their funds.
Counts 3 and 4: Wire fraud/conspiracy to commit wire fraud against Alameda’s lenders: Allegations included doctored balance sheets sent to companies from which Alameda sought to borrow millions of dollars.
Count 5: Conspiracy to commit securities fraud against FTX’s investors. Bankman-Fried was accused of misrepresenting the company’s financial health to investors.
Count 6: Conspiracy to commit commodities fraud against FTX customers. The charge alleged conspiracy to commit commodities fraud relating to stolen customer funds.
Count 7: Conspiracy to commit money laundering. This charge involved allegations of moving customer funds to Alameda’s accounts for investments and political donations.
Jarring revelations in court
The trial unveiled the chaos and deception in the final months before FTX’s collapse, as well as the privileges enjoyed by Alameda Research, Bankman-Fried’s other company. Notably, Alameda was granted a $65 billion line of credit derived from FTX customer accounts for risky investments and political contributions.
The repercussions of this trial are expected to have a lasting impact on the cryptocurrency industry as the public and investors alike learn about the extent of the fraud and misconduct within FTX and Alameda Research.
While the maximum sentence for his crimes was estimated at a daunting 115 years in prison, experts are now suggesting a more moderate range of 10 to 20 years, as reported by CoinDesk.