Sam Bankman-Fried, the co-founder and former CEO of FTX and Alameda Research, was found guilty of all charges including wire fraud, securities fraud, and money laundering.
The crimes culminated in the collapse of FTX and Alameda Research last November, revealing the mishandling and embezzlement of billions in customer assets. Bankman-Fried could face up to 115 years in prison.
BACKGROUND:
The collapse of the FTX centralized exchange was the largest fraud associated with the cryptocurrency industry.
On Nov. 2, 2022, CoinDesk reported that it had seen a “private financial document” indicating that 40% of the balance sheet for Alameda Research, FTX’s sister trading firm, or $5.9B worth of assets comprised FTX’s FTT token.
On Nov. 7, Binance announced it would soon liquidate its FTT holdings amid increasing concerns regarding FTX’s solvency, igniting a run on FTX’s reserves from users seeking to withdraw their assets from the exchange.
On Nov. 11, Bankman-Fried resigned as CEO and FTX filed for bankruptcy. The aftermath revealed $7B worth of assets missing.
From The Guardian:
“The verdict, reached after just four hours of jury deliberation, brought an end to nearly a month of court proceedings that featured stunning testimony from his closest allies and the disgraced entrepreneur himself. He maintained his innocence until the end.”
From CNBC:
“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history,” Damian Williams, U.S. attorney for the Southern District of New York, said in a briefing after the verdicts were read. “While the cryptocurrency industry might be new and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time. This case has always been about lying, cheating, and stealing, and we have no patience for it.”
From TechCrunch:
“The DOJ’s December 2022 indictment stated Bankman-Fried knowingly defrauded FTX customers by misusing their deposits to invest in other companies and pay off lenders and expenses. After mounds of evidence and a verdict, that statement has been deemed true by the court and jury.”
HOT TAKES
Hayden Adams, founder of Uniswap said:
“While I believe the SBF guilty verdict is the right outcome, imo it’s not a day to celebrate – billions in user funds were lost and our industry took a massive reputational hit. The only winners were a few law firms and various opponents of crypto.”
Nic Carter, general partner at Castle Island Ventures, said:
“Lot of people who raised money from Sam, participated in the FTX gravy train, went to every FTX party and conference, now spitting on his grave. If you were in the [SBF] orbit, probs best to pipe down for now. You know who you are.”
Unusual Whales, a financial influencer, shared data compiling each congress member that previously received donations from Bankman-Fried and FTX:
“SBF, Sam Bankman-Fried has been found guilty. However, around 40% of Congress (!!!) received donations from SBF and FTX that were mixed user funds! Only a few politicians returned or donated the funds.”
Autism Capital, a web3 researcher, said:
“Sam Bankman-Fried FAQs:
1) Guilty on 7 charges
2) Maximum sentence is 115 years
3) Sentencing is March 28, 2024.
4) Likely medium security prison.
5) He has a second trial March 11, 2024 for 5 more charges.
6) The second trial sentencing may likely also be done on March 28th.
7) Still no sign of Sam Trabucco.”
Adam Cochran, senior council to Synthetix, reposted a tweet published by Bankman-Fried on June 28, 2022:
“Backstopping customer assets should always be primary. Everything else is secondary.”
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- Source: https://thedefiant.io/sam-bankman-fried-found-guilty-on-all-counts-latest-news-and-hot-takes
