The former CEO of cryptocurrency exchange FTX, Sam Bankman-Fried, was convicted on seven counts of fraud, marking a significant downfall for the once-celebrated crypto entrepreneur, after a jury found him guilty in a case described by U.S. Attorney Damian Williams as “one of the biggest financial frauds in U.S. history.”

Background

• Bankman-Fried was accused of defrauding FTX’s customers, lenders, and investors, leading to the collapse of the cryptocurrency exchange and its sister trading firm Alameda Research.
• The dramatic fall came a year ago, incited by a massive imbalance in their financial accounts that resulted in billions of dollars in losses for customers.

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The Verdict

• The jury delivered their verdict on November 2, 2023, after five weeks of trial, with a tentative sentencing date set for March 28, 2024.
• Bankman-Fried faces a theoretical maximum sentence of 115 years in prison, although legal experts opine that a lesser sentence is more probable.
• Defense attorney Mark Cohen conveyed Bankman-Fried’s disappointment with the verdict but affirmed his client’s resolve to “vigorously fight the charges” in an appeal.
• On his part, Bankman-Fried acknowledged some “oversights” during his testimony but denied any fraudulent intent.

Key testimonies that swayed the trial came from former executives within Bankman-Fried’s empire, who pleaded guilty and testified against him, painting a picture of a well-orchestrated fraudulent scheme.

Besides the immediate charges, Bankman-Fried is slated to face another trial in March 2024 for additional charges including securities fraud, bank fraud, and violations under the Foreign Corrupt Practices Act.

The fall of FTX had repercussions that reached the Philippines. Before licensed crypto exchange Rebittance (SCI Ventures) ceased operating, the company disclosed an unfulfilled acquisition deal with Genesis Block; the deal fell through after the Hong Kong company ceased trading services amid the fallout of FTX. 

Resources: Coindesk, The Block, CNN

This article is published in BitPinas: FTX Founder Sam Bankman-Fried Convicted in Landmark Fraud Case

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