FTX founder Sam Bankman-Fried was found guilty on all charges on Thursday 2 November 2023. The 8 counts included fraud and money laundering.
Sam Bankman-Fried and the Rise of FTX
Bankman quickly rose to prominence with the rapid ramp-up of the FTX crypto exchange, which quickly became the second most successful crypto exchange by 2022. FTX was one of the largest cryptocurrency exchanges in the world, and Bankman-Fried was seen as a wunderkind who was revolutionizing the financial system.
In the Courtroom
According to the Financial Times, Bankman was silent, showing no emotion while he listened to the verdict. Throughout the trial he maintained his innocence. He did, however, admit that there were irregularities in the companies he managed, but those were simply mistakes and they didn’t had any bad faith behind these decisions.
Bankman was sentenced very quickly, as it was almost exactly a year ago that it was discovered that the FTX exchange he controlled had gone bankrupt, as it was discovered that there was insufficient collateral behind the exchange. Also it tuned out that investment firm Alameida research, also run by SBF, had been trading the money and cryptocurrencies of FTX users and investors without the knowledge of its clients, of course. This meant that SBF was already accused of fraud and money laundering.
According to the prosecution, he committed one of the biggest financial frauds in the US history, and this claim now confirmed by the court as well.
“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history,”
— Damian Williams, U.S. attorney for the Southern District of New York, said after the verdict has been announced.
“While the cryptocurrency industry might be new and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time. This case has always been about lying, cheating, and stealing, and we have no patience for it.”
– Williams added.
The trial is not over yet, as SBF is also due to stand trial in March 2024, where he will be charged with bribing foreign officials and violating campaign finance rules.