Sam Bankman-Fried, former boss of the cryptocurrency exchange platform FTX, was found guilty by a New York jury of charges of fraud, criminal conspiracy and money laundering. After five weeks of trial, the verdict is in and Mr. Bankman-Fried now faces a sentence of up to 110 years in prison.
The prosecution successfully demonstrated that Sam Bankman-Fried used funds deposited by FTX clients to finance the risky transactions and investments of his investment company, Alameda Research. The latter’s borrowings from FTX amounted to nearly $14 billion. According to Manhattan federal prosecutor Damian Williams, this is one of the largest financial frauds in US history, a scheme designed to make Mr. Bankman-Fried the king of cryptos.
The defendant attempted to plead good faith, admitting his mistakes but denying knowingly breaking the law. His lawyer stressed that Mr Bankman-Fried was a young, inexperienced entrepreneur rather than a criminal. However, the jury found that the defendant was in control and responsible for the decisions that led to the misappropriation of client funds.
The conviction of Sam Bankman-Fried is a strong signal sent to all those who think they are untouchable in the world of cryptocurrencies. The case also highlights the risks of the sector, where fraud and manipulation can have disastrous consequences for investors.
Beyond this conviction, the former trader will also face a second trial for bribery of a foreign agent and illegal political donation. He is accused of paying bribes to Chinese officials and using FTX funds to make donations to politicians, including Joe Biden’s presidential campaign.
This verdict is a warning to all crooks who think they can escape justice. Damian Williams emphasizes that financial crimes, even in the field of cryptocurrencies, do not go unpunished and calls on fraudsters to think twice before continuing their misdeeds.