Guilty of seven charges including fraud, conspiracy to commit fraud and conspiracy to launder money. This is the verdict issued by the New York federal jury against Sam Bankman Fried, considered until a few months ago the undisputed king of cryptocurrencies. According to the jurors, it was as unexpected as it was suddenor Ftx crack, one of the largest cryptocurrency exchange platforms in the world, was due to the illicit management of funds by Bankman-Fried who "made $8 billion of his clients disappear" to finance his luxurious expenses. The punishment will be decided during a hearing scheduled for March 28: the former Wall Street wunderkind faces up to 110 years in prison, but his lawyers have said they will appeal. It's about one of the largest financial frauds in the history of the United States.
The Ftx crack
Bankman-Fried's conviction closes the parable that initially saw the tumultuous rise of the cryptocurrency exchange platform, reflecting the euphoria that accompanied the discovery of these speculative and unregulated instruments by the general public, then the descent vertical and failure, to close an affair that ended in the worst way possible.
The scandal broke in November 2022, thanks to a huge CoinDesk journalistic investigation which revealed theto the financial fragility of Ftx and the possible scams carried out by his guru. The revelations provoked a crisis of confidence from customers who sought to withdraw their cryptocurrency investments. However, Ftx no longer had that money. The reason for the shortage, according to what emerged during the trial, was that Bankman-Fried allegedly used them to finance his life luxurious, made up of crazy expenses, jewels, properties in the Bahamas, political financing for the Republican Party and the Democratic Party, but above all to support the activity of AlamedaResearch, an investment fund he owned that was in dire straits.
Ftx was forced to declare bankruptcy and hundreds of thousands of investors and small savers have lost their money.
The process
During the trial, which began a month ago, the prosecution brought to testify dozens of former collaborators of the former crypto king who stated that Bankman-Fried had asked them to rig financial statements and to commit various crimes, including facilitating transfers of funds from Ftx to Alameda Research. Bankman-Fried also testified, a move considered very risky, claiming that the frauds occurred without his knowledge.
In the end the jury, unanimously and after only 5 hours of deliberation, found him guilty of all seven counts of which he was accused. Not only, new charges of bank fraud could arrive in the next months. The trial could take place in March.
“We respect the jurors' decision – commented lawyer Mark Cohen – but we are very disappointed with the result. Mr. Bankman-Fried believes he is innocent and will continue to vigorously defend himself against the charges." The lawyers have announced an appeal.
“The cryptocurrency industry – declared the Manhattan district attorney, Damian Williams – may be new, characters like Sam Bankman-Fried may be new, but this type of fraud is as old as the world".
