Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, was convicted on Thursday of seven charges of fraud and conspiracy. This comes after a monthlong trial that exposed the hubris and risk-taking prevalent in the crypto industry. Bankman-Fried was viewed as a symbol of crypto excesses when FTX collapsed last year and he was accused of stealing billions of dollars from customers for personal use. A jury consisting of nine women and three men deliberated for over four hours before reaching a verdict, finding Bankman-Fried guilty of wire fraud and conspiracy. The charges carry a maximum sentence of 110 years, and Bankman-Fried, 31, plans to appeal. He is scheduled to be sentenced on March 28.
This marks a significant downfall for Bankman-Fried, who was worth over $20 billion just a year ago and was considered a positive figure in the crypto industry. FTX, valued at $32 billion at its peak, was one of the largest platforms for trading digital coins. Some crypto enthusiasts hope that this conviction will provide closure and allow the industry to move forward after a year filled with scandals. However, critics see this as a sign that the industry may face more legal consequences as it tries to regain public trust.
Bankman-Fried faced an uphill battle in court, especially after three of his top deputies pleaded guilty to fraud and cooperated with prosecutors. During the trial, they testified that Bankman-Fried instructed them to misappropriate customer funds and deceive the public about the whereabouts of the money. Bankman-Fried’s defense argued that he operated in good faith and never intended to break the law, but they struggled to undermine the cooperators’ testimonies.
Bankman-Fried gained prominence by presenting himself as a billionaire who aimed to give away his wealth. He founded FTX in 2019 and raised billions of dollars to establish it as a leading crypto company. However, FTX collapsed in November 2021, revealing a significant financial shortfall. Bankman-Fried resigned as CEO, and the company filed for bankruptcy. He was subsequently arrested in the Bahamas, where FTX was headquartered.
Throughout the trial, the government presented multiple witnesses, including the cooperating defendants who had lived with Bankman-Fried and testified to his fraudulent activities. The collapse of FTX was described as a massive fraud that resulted in billions of dollars in losses for thousands of people. Bankman-Fried’s conviction may not mark the end of his legal battles, as he is expected to face another trial on campaign finance and other charges in the future. The limitations imposed on his defense during the trial, as well as his time spent in jail, may also be grounds for an appeal.