Sam Bankman-Fried, the embattled founder of FTX, one of the world’s largest cryptocurrency exchanges, has been found guilty of fraud and money laundering after a month-long trial in New York.
The verdict concludes a sharp turnaround in events for Mr Bankman-Fried, recognised as one of the major faces in the crypto industry.
The 31-year-old was arrested last year after his FTX firm went bankrupt with over $8 billion in customer funds missing and faces decades in jail, with his sentencing slated for March 28 next year.
U.S. Attorney Damian Williams explained that Mr Bankman-Fried carried out one of the biggest financial frauds in American history.
“ Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history — a multibillion-dollar scheme designed to make him the king of crypto,” Mr Williams said after the verdict.
“This case has always been about lying, cheating, and stealing, and we have no patience for it,” he added.
The jury found him guilty of lying to investors and lenders and stealing billions of dollars from FTX, leading to the collapse of the crypto exchange. He is charged with seven counts of fraud and money laundering.
After the verdict, Mr Bankman-Fried’s lawyer, Mark Cohen, maintained that his client was innocent of the charges and mostly acted in good faith.
“We respect the jury’s decision. But we are very disappointed with the result,” Mr Cohen said. “Mr Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him.”
The prosecution presented evidence to the court that Mr Bankman-Fried’s crypto trading firm, Alameda Research, received huge funds from FTX customers in the early days of the exchange.
Mr Bankman-Fried now proceeded to use the funds to repay Alameda lenders, buy property, make investments, and make political donations instead of safeguarding the funds as he promised to do in public.
The five charges Mr Bankman-fried was found guilty of each carries a maximum prison term of 20 years, with a five-year maximum on the other two. This adds up to a potential maximum sentence of 110 years.
However, it is unlikely that the judge will impose such a maximum sentence, but it is expected that Mr Bankman-fried will spend at least a decade behind bars.
The FTX cryptocurrency exchange, at its peak, was valued at $32 billion (£26 billion). The firm filed for bankruptcy in November last year, leading to the arrest of the founder and him being sued for defrauding investors.
The collapse of FTX started in November 2022 and was caused by a liquidity crisis of the company’s token, FTT.
Experts believe the liquidity crisis of the FTT token to be the main reason why FTX went bankrupt.
Before FTX went bankrupt, Mr Bankman-fried was worth billions of dollars. He appeared in Forbes Magazine as one of the leading lights of the crypto industry and went by the moniker “ The king of crypto”’
His fall from grace has pointed out one of the major concerns of the crypto industry, which is still widely unregulated and rife with criminality.