In a significant development, the founder of the now-defunct crypto exchange FTX, Sam Bankman-Fried, has been convicted of defrauding his clients. This verdict was delivered by a jury in the trial of the former CEO, which concluded on Thursday.
The 31-year-old billionaire faced a total of seven charges, including two counts of fraud and five counts of conspiracy, and was found guilty on all counts. The trial, which commenced in early October, saw prosecutors alleging that Bankman-Fried misappropriated a staggering $8 billion (equivalent to over 7.5 billion euros) from his customers, making it one of the most significant financial fraud cases in recent history.
During the proceedings, it was revealed that Bankman-Fried had transferred assets from FTX clients to his investment fund, Alameda Research, and subsequently engaged in risky investments. This unethical behavior ultimately led to FTX’s insolvency, leaving clients unable to access their funds. Testimonies from associates and colleagues pointed to Bankman-Fried’s direct involvement in orchestrating the deception of clients.
While the former CEO admitted to making mistakes in the lead-up to FTX’s bankruptcy, he vehemently denied having stolen from his clients. Bankman-Fried argued that he believed it was permissible for Alameda to access funds from FTX and claimed ignorance regarding the magnitude of the debts that eventually led to both companies going bankrupt. His legal team maintained that they were fully aware of the transactions involving the transfer of funds from FTX clients to an Alameda bank account.
The potential consequences for the fraud and conspiracy charges on which Bankman-Fried was found guilty are substantial, with a maximum sentence of 110 years. The actual length of his sentence will be determined in a hearing scheduled for March 28, 2024. In response to the verdict, Bankman-Fried announced his intention to challenge the conviction shortly after the ruling on Thursday.
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