FTX founder Sam Bankman-Fried was discovered responsible on Thursday of stealing from prospects of his now-bankrupt cryptocurrency trade in a single of the most important monetary frauds on document, a verdict that cemented the 31-year-old former billionaire’s fall from grace.
A 12-member jury in Manhattan federal courtroom convicted Bankman-Fried on all seven counts he confronted after a monthlong trial through which prosecutors made the case that he looted $8 billion (roughly Rs. 6,66,00 crore) from the trade’s customers out of sheer greed.
The verdict got here simply shy of one yr after FTX filed for chapter in a swift company meltdown that shocked monetary markets and erased his estimated $26 billion (roughly Rs. 2,16,450 crore) private fortune.
The jury reached the decision after simply over 4 hours of deliberations. Bankman-Fried, who had pleaded not responsible to 2 counts of fraud and 5 counts of conspiracy, stood dealing with the jury together with his fingers clasped in entrance of him as the decision was learn.
The conviction was a victory for the US Justice Department and Damian Williams, the highest federal prosecutor in Manhattan, who made rooting out corruption in monetary markets one of his prime priorities.
“The crypto industry might be new, the players like Sam Bankman-Fried may be new, but this kind of fraud is as old as time and we have no patience for it,” Williams informed reporters exterior the courthouse.
Once the darling of the crypto world, Bankman-Fried – who was identified for his mop of unkempt curly hair and for carrying shorts and T-shirts quite than enterprise apparel – joins the likes of admitted Ponzi schemer Bernie Madoff and “Wolf of Wall Street” fraudster Jordan Belfort as notable folks convicted of main US monetary crimes.
US District Judge Lewis Kaplan set Bankman-Fried’s sentencing for March 28, 2024. The Massachusetts Institute of Technology graduate may face many years in jail.
His defence lawyer Mark Cohen mentioned in an announcement that he was “disappointed” however revered the jury’s determination.
“Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him,” he mentioned.
After Kaplan left the courtroom, Cohen put his arm round Bankman-Fried as they spoke on the defence desk.
As Bankman-Fried was led away by members of the US Marshals service, he circled and nodded at his mother and father, the Stanford Law School professors Joseph Bankman and Barbara Fried, who have been seated within the courtroom viewers’s entrance row. Fried regarded towards him and crossed her arm throughout her chest.
Bankman-Fried is ready to go on trial subsequent March on a second set of expenses introduced by prosecutors earlier this yr, together with for alleged overseas bribery and financial institution fraud conspiracies.
Bankman-Fried testified in personal defence
Bankman-Fried’s was the primary of a number of blockbuster instances Williams introduced in opposition to former high-flying cryptocurrency executives to go to trial. Several crypto firms went bankrupt final yr after the costs of bitcoin and different digital belongings collapsed following a years-long growth.
Prosecutors argued through the trial that Bankman-Fried siphoned cash from FTX to his crypto-focused hedge fund, Alameda Research, regardless of proclaiming on social media and in tv ads that the trade prioritized the protection of buyer funds.
Alameda used the cash to pay its lenders and to make loans to Bankman-Fried and different executives – who in flip made speculative enterprise investments and donated upwards of $100 million (roughly Rs. 832 crore) to US political campaigns in a bid to advertise cryptocurrency laws the defendant considered as favorable to his enterprise, based on prosecutors.
Bankman-Fried took the calculated danger of testifying in his personal protection over three days close to the shut of trial after three former members of his internal circle testified in opposition to him. He confronted aggressive cross-examination by the prosecution, usually avoiding direct solutions to essentially the most probing questions.
He testified that whereas he made errors operating FTX, corresponding to not formulating a risk-management workforce, he didn’t steal buyer funds. He mentioned he thought Alameda’s borrowing from FTX was allowed and didn’t understand how giant its money owed had grown till shortly earlier than each firms collapsed.
“We thought that we might be able to build the best product on the market,” Bankman-Fried testified. “It turned out basically the opposite of that.”
‘He thought the principles didn’t reply’
Prosecutors had a unique view.
“He didn’t bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits – billions and billions of dollars – to give himself money, power, influence. He thought the rules did not apply to him. He thought that he could get away with it,” prosecutor Danielle Sassoon informed the jury on Thursday.
The jury heard 15 days of testimony. Former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, testifying for the prosecution after getting into responsible pleas, mentioned he directed them to commit crimes, together with serving to Alameda loot FTX and mendacity to lenders and traders in regards to the firms’ funds.
The protection argued the three, who haven’t but been sentenced, falsely implicated Bankman-Fried in a bid to win leniency at sentencing. Prosecutors might ask Kaplan to take their cooperation under consideration in deciding their punishment.
Bankman-Fried has been jailed since August after Kaplan revoked his bail, having concluded he possible tampered with witnesses.
© Thomson Reuters 2023
