FTX Founder Convicted on All Criminal Fraud Counts After Crypto Exchange's Collapse
00:01 GMT 03.11.2023 (Updated: 00:43 GMT 03.11.2023)
© AFP 2023 / ANGELA WEISS
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Sam Bankman-Fried once ran the largest cryptocurrency exchange in the world, but his empire collapsed late last year after declaring bankruptcy, with later reports noting the platform owes its customers $8.7 billion. The former CEO is potentially facing another trial over campaign contributions he made and alleged foreign bribery.
A US jury has found FTX founder Sam Bankman-Fried guilty on all seven criminal fraud counts linked to the historic collapse of his cryptocurrency exchange platform.
He was found guilty of two counts of wire fraud, two counts of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud and one count of conspiracy to commit money laundering.
He was found guilty of two counts of wire fraud, two counts of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud and one count of conspiracy to commit money laundering.
Bankman-Fried's mother Barbra Fried and his father, Joe Bankman, attended their son's trial. As US Marshalls led the former cryptocurrency exchange CEO out of the courtroom, Barbra Fried reportedly held her face in her hands and stifled a sob.
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Bankman-Fried faces up to 110 years in prison if sentenced to the maximum amount for each charge. He was accused of using up to $10 billion in customer funds to buy real estate, invest in other cryptocurrency companies, make political campaign contributions and pay back lenders of Alameda Research, a trading firm he also controlled.
Bankman-Fried is expected to appeal the result. Judge Lewis Kaplan, who presided over the case, has requested that the government inform him if Bankman-Fried will face a second charge of campaign finance violations and foreign bribery, saying that he wants a decision by February.
A potential second trial could affect Bankman-Fried's sentencing date, which is currently set for March 28.
Bankman-Fried reported $39.9 million in political contributions over 2021 and 2022. The FTX exchange declared bankruptcy in November 2022.
The prosecution painted Bankman-Fried as a liar, arguing he was motivated by greed. The prosecutor's witnesses, which included many former employees of FTX and friends of Bankman-Fried, backed up the claims.
Adam Yedidia, who worked as a developer for FTX, testified that Bankman-Fried had told him FTX and Alameda Research were on shaky ground after the price of cryptocurrency dropped.
But the star witness proved to be Caroline Ellison, Bankman-Fried's former girlfriend, who testified Bankman-Fried directed or greenlit several instances of using FTX customer deposits to shore up Alameda Research. Ellison has pleaded guilty to fraud charges and has been cooperating with prosecutors.
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Another significant witness testimony came from Gary Wang, FTX's co-founder. He testified Bankman-Fried directed him to implement features that would give Alameda an advantage over other traders on the FTX platform. Wang also pleaded guilty to fraud in the same case as Ellison.
The jury consisted of nine women and three men. The nearly monthlong trial included two weeks of testimony. The defense attempted to argue that many of the witnesses who took the stand were former employees who already pleaded guilty, therefore taking responsibility for their actions and off of Bankman-Fried, but the jury did not appear to buy it, convicting him on all accounts.
The former crypto-mogul took the uncommon approach of taking the stand during his trial, using the time to argue that he didn't intend to steal from or defraud anyone, but the move seemed to backfire as Bankman-Fried responded that he "couldn't recall" more than 140 times to questions from prosecutors.
Damian Williams, the top federal prosecutor in New York, said that though the cryptocurrency industry is new, the corruption put on display by Bankman-Fried "is as old as time."
