A verdict in record time. The guilt of Sam Bankman-Fried, founder of the FTX cryptocurrency platform, seemed so obvious that the jury took only five hours this Thursday to find him guilty of massive fraud for the collapse of the company, now a year ago. The trial was also quick, lasting just one month, thanks in part to the fact that his three closest collaborators in the company, including his ex-girlfriend and head of the Alameda Research hedge fund, chose to collaborate with justice and testify against the unfortunate guru. of cryptocurrencies.
SBF, the initials by which he is known, has been found guilty of seven counts of fraud and conspiracy for which he faces a maximum sentence of 110 years in prison, less than 24 hours after lawyers for the parties will present their final arguments. The jury rejected the 31-year-old Californian’s line of defense, according to which he did not defraud anyone and therefore rejected his guilt, although in his statement last Friday, he admitted management errors. SBF had been held in a crowded Manhattan jail since August, when Judge Lewis Kaplan revoked the parole he was enjoying, on bail of $250 million, for attempting to influence potential trial witnesses and leaking parts of those statements to the press. communications.
The spectacular rise and fall of the FTX founder as a cryptocurrency guru, with a growing public and even political presence – he tried to gain influence in Washington by financing candidates from both parties and flirted with the idea of a possible run for the presidency – definitively hit rock bottom. this Thursday, being found guilty of defrauding clients and investors of at least $10 billion. Caroline Ellison, her ex-girlfriend and the prosecution’s star witness, testified that Alameda took several billion dollars of money from FTX clients and used it for his own investments and to pay off debts he owed. Also to cover the excesses of a life of luxury in which Bankman, according to the biography of Michael Lewis published on the occasion of the trial, was unable to appoint three of his lieutenants in the firm, since he hired them only to sign documents to anyone. time of day (or early morning).
Bankman testified for three days on the stand that he never committed fraud or intended to deceive customers while leading FTX, the world’s second-largest cryptocurrency exchange. The administrators’ report, however, reflects a very different reality: that the managers joked about how they lost track of millions of dollars and that the fall of the cryptocurrency firm was due to “the arrogance, incompetence and greed” of a group of twenty-something entrepreneurs locked in a $30 million house in the Bahamas, the headquarters of FTX.
“His crimes have caught up with him. “His crimes have been exposed,” Assistant U.S. Attorney Danielle Sassoon told jurors about the one-time billionaire’s onward flight just before Judge Kaplan read the law to them and deliberations began. Sassoon claimed that Bankman-Fried turned his clients’ accounts into his “personal piggy bank” as up to $14 billion disappeared.
He urged jurors to reject Bankman-Fried’s insistence when he testified that he never committed fraud or conspired to steal from clients, investors and lenders and that he did not realize that his companies were at least $10 billion in debt. until October 2022, a month before it filed for bankruptcy. For federal prosecutor Damian Williams, the founder of FTX, son of two law professors at Stanford University, carried out one of the largest frauds in the history of the United States. The process focused on the emerging and poorly regulated cryptocurrency industry and on the group of young entrepreneurs in their twenties who cohabited in a luxurious mansion in the Bahamas while dreaming of becoming leading actors in a new niche in finance.
The trial also generated widespread interest as it focused on fraud on a scale not seen since the 2009 indictment of Bernard Madoff, whose Ponzi scheme defrauded thousands of investors out of some $20 billion for decades. Madoff pleaded guilty and was sentenced to 150 years in prison, where he died in 2021.
The verdict reached today in Manhattan federal court puts an end to the noisy collapse of FTX. Extradited last November to the United States from the Bahamas, SBF is another example of a disgraced technological king Midas, like Elizabeth Holmes, founder of Theranos. Both share another circumstance, in addition to their respective prison sentences (Bankman’s, yet to be determined by the judge): they decided, against the opinion of their lawyers, to testify in their respective trials to overcome adverse image campaigns, but they did not It went well for none of them due to the accumulation of evidence against it.
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