In a dramatic turn of events, Sam Bankman-Fried, formerly one of the cryptocurrency world’s most prominent figures and the founder of FTX, has been found guilty of fraud and money laundering following a month-long trial in New York. The verdict marks a significant fall from grace for the 31-year-old entrepreneur, who was once known as the “King of Crypto” and is now facing the prospect of decades in prison.
FTX, a cryptocurrency exchange that was once valued at $32 billion, declared bankruptcy in November the previous year, leaving approximately $8 billion in customer funds unaccounted for. Bankman-Fried was subsequently arrested.
The jury reached its decision after less than five hours of deliberation, concluding that he had lied to investors and lenders while embezzling billions of dollars from FTX, contributing to its ultimate collapse. He faced seven counts of fraud and money laundering and had pleaded not guilty to all charges, maintaining that his actions were made in good faith.
Following the verdict, Bankman-Fried’s lawyer expressed disappointment with the outcome but affirmed the entrepreneur’s innocence, vowing to continue the legal fight. Three of his former associates, including his ex-girlfriend Caroline Ellison, who pleaded guilty and testified against him in exchange for reduced sentences, are also awaiting their own sentencing.
The case revealed that Bankman-Fried’s crypto trading firm, Alameda Research, had received deposits on behalf of FTX customers when traditional banks refused to do so. Instead of safeguarding these funds as promised, Bankman-Fried used them to repay lenders, invest in real estate, and make political donations. Of the seven charges he faced, five carry a maximum prison term of 20 years, with the other two having a maximum of five years, leading to a potential maximum sentence of 110 years.
Bankman-Fried’s trial held significant implications for the crypto industry as a whole, highlighting ongoing challenges in the sector. Regulatory concerns and criminal activity have plagued the industry, and while Congress is yet to pass specific crypto regulations, legal battles and civil cases are expected to persist within the US courts, involving entities like the SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission).
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Source: BBC News
