Sam Bankman-Fried – The Crypto King Found Guilty
7 November 23
To no surprise to anyone the former cryptocurrency magnate Sam Bankman-Fried was found guilty of fraud and money laundering in the wake of a month-long trial held in New York. Bankman-Fried, once hailed the “King of Crypto”, now is faced with a very lengthy prison sentence. Sam Bankman-Fried was arrested late last year in the Bahamas by the local police and extradited to the US soon after. The arrest came after his cryptocurrency exchange’s – FTX collapse, which left $8 billion of customer funds missing.
The jury reached their decision in less than five hours, finding Sam Bankman-Fried guilty on all seven counts of fraud and money laundering. The charges include lying to investors and lenders and embezzling billions of dollars from FTX, strongly contributing to the collapse of the exchange.
Even though Bankman-Fried maintained his innocence throughout the trial, three former associates of his, including ex-girlfriend Caroline Ellison, pleaded guilty and in turn agreed to testify against him for reduced sentences.
The prosecution provided hard evidence that defendant’s crypto trading firm, Alameda Research, received and used deposits that were meant for FTX customers for other purposes, including repaying lenders, property purchases, investments, and political donations.
Five of the seven criminal charges carry a maximum prison term sentence of 20 years, the remaining two a maximum of five years. Quick-maths: that is a potential prison sentence of 110 years. It is unlikely that the judge will impose the maximum sentence, but Bankman-Fried is expected to spend decades in prison.
This trial drew a lot of attention to and within the cryptocurrency industry, potentially increasing future regulatory scrutiny within the crypto space. There is a potential second trial on other charges against Sam Bankman-Fried, those include campaign finance violations.
Before the FTX collapse Sam Bankman-Fried was a prominent figure in the crypto industry, a person who earned the moniker “the king of crypto” for the rapid growth of FTX and his ability to make deals. Experts predict that the crypto industry will become a battleground in US courts with the involvement of agencies like the Securities and Exchange Commission and Commodity Futures Trading Commission.