Sam Bankman-Fried, who was once hailed as the great genius of cryptocurrencies, was found guilty by a New York jury on Thursday of a massive fraud that affected thousands of his customers.
Just a year ago, his company, FTX, was considered the most successful virtual currency business, and then suddenly it collapsed, dragging down other businesses in the industry and transforming the landscape. Bankman-Fried was arraigned in a Manhattan court in recent weeks on seven counts of online fraud, stock fraud and money laundering involving his financing company, Alameda Research. According to prosecutor Damian Williams, of the Southern District of New York (Manhattan), Bankman-Fried perpetrated "one of the largest financial frauds in the history of the United States." "The digital currency industry might be new, investors like Bankman-Fried might be new, but this kind of fraud, this kind of corruption, is from the old days," he stressed. Stamp scam version 2.0.
After this verdict, the 31-year-old prodigy, who won the favor of politicians with his donations, faces up to 110 years in prison. The sentencing hearing has been set for March 28, 2024.
FTX and its associate Alameda Research collapsed in November 2022 after their financial shortcomings were exposed. The bubble was punctured. Alameda had taken billions of dollars from FTX clients and diverted them into its founder's accounts and other investments.
When the liquidity problem transpired, many of the clients tried to recover their investments. In vain SBF could not explain where the money had gone. Nor has he clarified it in the trial.
It all faded away and billions of dollars disappeared, while other huge sums went into party donations and SBF spending on luxury and ostentation. Suddenly, the value of the investments collapsed and FTX was unable to return much of the money because it had evaporated.
Bankman-Fried, always accompanied by his parents in the courtroom, testified in his own defense. His testimony doesn't seem to carry the same weight as that of several inside sources, including his ex-girlfriend, who spoke against his operations. The lawyers agreed that the accused's decision to testify at the oral hearing did nothing more than complicate the work of the lawyers and dig his own grave.
His defenders have already announced that they will appeal against the decision. "We respect the jury's decision, but we are very disappointed with this result," said Mark Cohen, attorney for Bankman-Fried. "He maintains his innocence and we will fight the charges," he added.
