LONDON (Bywire News) - Sam Bankman-Fried, the once-prominent founder of the now-defunct cryptocurrency exchange FTX, has been found guilty on all seven charges of wire fraud and money laundering conspiracy, concluding a tumultuous trial that has captured the attention of the financial world. The verdict was delivered on Thursday in a Manhattan federal court, marking a dramatic fall from grace for the young entrepreneur.
The trial, which lasted nearly a month, saw Bankman-Fried face accusations of defrauding FTX customers out of an estimated $10 billion. The prosecution presented a compelling case, detailing how Bankman-Fried had engaged in a series of fraudulent activities from 2019 until the collapse of FTX in November 2022. The exchange's downfall was attributed to the misuse of customer funds, which were secretly loaned to Alameda Research, FTX’s sister hedge fund.
Bankman-Fried's defence centred around his lack of intentional wrongdoing, with his legal team portraying him as a well-intentioned but overwhelmed individual. Despite these efforts, the jury took just four hours of deliberation to reach their unanimous guilty verdict. Bankman-Fried now faces a potential decades-long prison sentence, with his sentencing hearing scheduled for 28 March 2024.
Throughout the trial, the court heard damning testimony from several of Bankman-Fried's closest associates, including Caroline Ellison, the CEO of Alameda and Bankman-Fried’s on-again, off-again girlfriend. Ellison, who had previously pleaded guilty to her role in the scheme, testified that Bankman-Fried had directed her to commit the crimes in question. Other former colleagues, including FTX co-founder Gary Wang and executive Nishad Singh, also took the stand against Bankman-Fried, further implicating him in the fraudulent activities.
The trial has shed light on the inner workings of FTX and Alameda, revealing a culture of recklessness and a lack of proper oversight. Bankman-Fried himself admitted to significant managerial failings, including never establishing a risk management team. His attempts to evade responsibility were thwarted by previous statements made during a post-collapse media tour, leaving his credibility in tatters.
As the crypto world grapples with the fallout of the FTX collapse, the conviction of Sam Bankman-Fried serves as a stark reminder of the risks associated with the nascent industry. The case has also raised questions about the adequacy of current regulations and the need for greater oversight to protect consumers from similar fates in the future.
(By Michael O'Sullivan)