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Sam Bankman-Fried Found Guilty in FTX Crypto Fraud Case
Founder of FTX Sam Bankman-Fried was found guilty of all seven counts of fraud, conspiracy and money laundering after more than two weeks of testimony in one of the highest-profile financial crime cases in years.
The 31-year-old former cryptocurrency billionaire was found guilty of all seven counts of fraud, conspiracy and money laundering, charges each carrying a maximum sentence of 20 years in prison. He was also convicted of conspiracy to commit commodities fraud and conspiracy to commit securities fraud, each carrying a maximum sentence of five years.
“Sam Bankman-Fried perpetrated one of the greatest frauds in American history, a multibillion-dollar scheme intended to make him the king of crypto,” said Damian Williams, U.S. Attorney for the Southern District of New York, during a press briefing following the affair. verdict. “Here’s the thing: The cryptocurrency industry might be new. Actors like Sam Bankman-Fried might be new. This type of fraud, this type of corruption, is as old as time, and we have no be patient with this.”
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The MIT graduate has steadfastly maintained his innocence since his arrest late last year following the surprising implosion of FTX, the crypto exchange he co-founded, amid an 8-year fund deficit billion dollars and allegations that he used client money to prop up his struggling hedge fund. Search Alameda.
Bankman-Fried’s attorney, Mark S. Cohen, said in a statement: “We respect the jury’s decision. But we are very disappointed with the result. Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him. him.”
Bankman-Fried was accused of using some of that money to buy real estate, make political contributions, and fund charitable projects, among other purposes unrelated to FTX’s business of allowing people to buy and exchange digital currencies.
More broadly, FTX bankruptcy in November 2022 has cast a cloud over the entire crypto industry, as the sudden collapse of other major players in the industry has vaporized billions of customers’ wealth.
As the verdict was read, Bankman-Fried stood frozen, facing the jury. His parents, sitting in the courtroom, held each other in their arms, keeping a close eye on each other.
It is a stunning, supersonic fall from grace for a man who, according to his lawyers, still believed, twelve months ago, that his billion-dollar empire was solvent.
“So many people believed in him, he was a genius,” Natalie Tien, a former FTX employee, told CBS News.
Tien said attending her former boss’s trial was cathartic after experiencing months of confusion and depression when her empire collapsed and she too “lost a lot of money”.
“Sam Bankman-Fried believed he was above the law,” U.S. Attorney Merrick Garland said in a statement. “Today’s verdict proves he was wrong. This case should send a clear message to anyone trying to hide their crimes behind a shiny new thing that they claim no one else is smart enough to understand: the Department of Justice will hold you accountable.”
Bankman-Fried’s attorney and federal prosecutors presented its final conclusions to a New York City juror Wednesday after more than four weeks of testimony.
Prosecution witnesses included Caroline Ellison, Nishad Singh and Gary Wang, all of whom worked for Bankman-Fried at FTX or Alameda and all of whom pleaded guilty to multiple charges, including participating in an alleged scheme to defraud millions of customers .
The three men accused him of orchestrating the use of FTX clients’ money to make purchases ranging from a luxury condo in the Bahamas to covering losses at Alameda, the cryptocurrency hedge fund by Bankman-Fried.
Ellison testified that Bankman-Fried directed her to siphon money from FTX client accounts to fund investments and trading strategies at Alameda, where she was CEO until the collapse of FTX and FTX. FTX co-founder Wang detailed how he and the accused engaged in financial crimes and lied about it, while Singh, FTX’s former director of engineering, detailed how Bankman- Fried spent FTX’s money.
Defense attorneys sought to portray Bankman-Fried as a math enthusiast who made poor management decisions at FTX, but had nothing criminal in mind while building his crypto empire.
FTX founder Sam Bankman-Fried cross-examined by prosecutors in fraud and money laundering trial
In the end, it may have been the hubris during Bankman-Fried’s own testimony that carried the most weight and caused the most damage. During prosecution cross-examination, Bankman-Fried said “more than 140 times” that he did not remember a document, conversation or other key details. The government has repeatedly said it was because “he was lying.”
Bankman-Fried said he believed Alameda’s expenses came from corporate funds and not from customers, and that the mistakes he made were not malicious. FTX aimed to “move the ecosystem forward,” he testified during the proceedings. “It turned out to be the opposite.”
It is now up to Judge Lewis Kaplan to determine what sentence Bankman-Fried will receive. Although the charges carry a statutory minimum sentence of 110 years and the sentencing guidelines provide a type of formula, the judge has broad discretion to rule below that guideline. However, CBS News legal analyst Rikki Klieman says that if Judge Kaplan “believes the defendant committed perjury in his courtroom, he might even go beyond the guidelines.”
For her part, Tien, the former FTX employee, said the prison sentence might be too harsh, wondering whether Bankman-Fried could perhaps instead help the government investigate other potential securities fraud. crypto trading.
The next trial in the United States v. Sam Bankman-Fried saga is scheduled for March 11, 2024, when other charges that the government has not brought forward will be incorporated into a new legal proceeding.
This trial ends almost a year to the day FTX stopped allowing customers to withdraw deposits, marking the beginning of the end of the so-called king of crypto’s meteoric rise.