Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, culminated on Thursday with his conviction on seven counts of fraud and conspiracy. The trial, which lasted for a month, exposed the excessive risk-taking and rampant hubris in the crypto industry.
Bankman-Fried became a symbol of the industry’s excesses in 2021 when FTX collapsed, and he was charged with stealing up to $10 billion. The verdict carries a maximum sentence period of 110 years, and Bankman-Fried is expected to appeal the ruling.
The conviction led to mixed responses among crypto enthusiasts, with some saying that it’s a sign that scammers will face the consequences of their actions. In contrast, others argued that it could cause legal implications for the sector.
During the trial, prosecutors produced millions of internal messages and other evidence against Bankman-Fried, and three of his top deputies pleaded guilty to fraud charges. They claimed Bankman-Fried repeatedly instructed them to lie to the public and route billions of dollars in customer funds from FTX to its sister trading firm, Alameda Research.
Bankman-Fried’s lawyers argued that he had acted in good faith and never intended to break the law, but they struggled to refute the evidence produced by the prosecution. Before the trial, Bankman-Fried marketed himself as a billionaire who founded FTX to become one of the world’s leading crypto companies.
He hobnobbed with politicians and movie stars, made tens of millions of dollars in campaign contributions to Democrats and Republicans, and was worth over $20 billion. However, the collapse of FTX last year showed an $8 billion hole in its accounts, leading to FTX filing for bankruptcy and forcing Bankman-Fried to step down as CEO.
He was arrested at his home in the Bahamas in December 2021, where FTX was headquartered. Bankman-Fried’s legal battle is expected to continue despite the conviction as he awaits a second trial on campaign finance and other charges next year.
Some restrictions faced by Bankman-Fried and his lawyers during court proceedings could form the basis of an appeal against the verdict. The crypto industry is likely to welcome Bankman-Fried’s conviction as a sign of a maturing industry, but it also serves as a reminder that fraud and corruption are as old as time.
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