Dhe former cryptocurrency entrepreneur Sam Bankman-Fried has been convicted in his fraud trial. A jury in New York found him guilty on seven counts. They saw it as proven that the 31-year-old embezzled eight billion dollars in customer money out of pure greed in order to speculate and finance a lavish lifestyle. The sentence will be decided later. Bankman-Fried faces decades in prison – in the worst case scenario, it could be more than 100 years in prison.
The FTX founder had previously pleaded not guilty to two counts of fraud and five counts of conspiracy. The jury only needed around five hours to make their decision after the prosecution and defense had finished their closing arguments. “This was a pyramid of fraud that the defendant built on a foundation of lies and false promises just to get money,” prosecutor Nicolas Ross said in his closing argument. “He had the arrogance to think he could get away with it.”
The former star entrepreneur Bankman-Fried himself testified in the trial, but according to observers he did not cut a convincing figure. The defendant admitted mistakes but denied allegations of fraud. Bankman-Fried’s attorney, Mark Cohen, said Thursday that defense attorneys were disappointed with the jury’s outcome and continued to believe the 31-year-old was innocent. The FTX founder’s lawyers are expected to appeal the ruling.
US justice accuses Bankman-Fried of diverting billions of dollars
Bankman-Fried became known worldwide as the founder of the cryptocurrency exchange FTX, which collapsed spectacularly a year ago. The US justice system accuses the 31-year-old of having diverted billions from the assets of FTX customers without their knowledge in order, among other things, to finance risky transactions by his hedge fund Alameda Research. When these deals went wrong, FTX was also caught in the vortex. According to the indictment, Bankman-Fried is said to have ensured that Alameda was able to borrow money from FTX without providing the usual collateral. He himself shrugged off responsibility in court and referred to the decisions of others.
Bankman-Fried had been heavily burdened in the process by former close colleagues such as Alameda boss Caroline Ellison. He himself said in court that he only partially understood the financial situation of his companies. He was “very surprised” by the extent of the problems when he learned in October 2022 that Alameda Research had around $8 billion in debt to FTX.
Before the collapse, FTX was one of the largest trading venues for cryptocurrencies like Bitcoin. In December, Bankman-Fried was arrested in the Bahamas. FTX had its headquarters there.
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