Sam Bankman-Fried has been found guilty in the multi-billion dollar FTX fraud with his sentencing scheduled for March 2024.
FTX founder Sam Bankman-Fried or SBF was convicted on Thursday over the historic meltdown of the once-thriving centralized crypto exchange which left numerous users in huge losses.
Sam Bankman-Fried Woes Intensifies
According to a report from Reuters, a jury of 12 members found SBF guilty of all seven charges levelled against him over the FTX collapse, including two counts of fraud and five counts of conspiracy.
The jury’s decision follows an extended trial in the Manhattan federal court, where prosecutors made a case that SBF defrauded $8 billion from FTX exchange customers.
In particular, Damian Williams and the prosecution team contended during the trial that SBF siphoned FTX users’ funds to his sister hedge fund company Alameda Research.
Prosecutors added that Alameda Research used these funds to settle lenders and offer unsettled loans to Bankman-Fried and other company executives. The report further added that SBF donated millions of dollars to U.S. political campaigns to secure legislation favourable to his business.
Moreover, former Alameda Research CEO Caroline Ellison and other ex-FTX executives testified for the prosecution, noting that SBF directed them to commit crimes such as deceiving lenders, lying about companies’ finances and ripping off FTX customers.
SBF, who pleaded not guilty to these charges against him acknowledged his poor risk management measures but denied stealing customers’ funds.
Regardless, U.S. District Judge Lewis Kaplan has set March 28, 2023, for the sentencing of the 31-year-old FTX exchange founder. While Bankman-Fried’s lawyers are expected to appeal the verdict, several reports claim that SBF faces a maximum sentence of 115 years in prison.
It bears mentioning that Bankman-Fried’s FTX exchange, a one-time second-largest centralized crypto trading platform, collapsed in November 2022. Likewise, the platform’s native currency —FTT— lost all its value following a massive sell-off event.
Notably, FTX’s descent which left numerous users in huge losses was triggered by a series of factors including the commingling of customers’ funds, lack of proper risk management by the exchange and poor business management amongst others.
Overall, SBF’s conviction comes about a year after the FTX collapse incident, marking a victory for the U.S. Department of Justice and affected users. With several countries like the UK closing in on crypto regulation, issues similar to the Bankman-Fried and FTX saga could be eliminated.