Founder of FTX found guilty of fraud in the US – 11/02/2023 – Market

Sam Bankman-Fried, former cryptocurrency tycoon and founder of the FTX brokerage, was convicted this Thursday (2) of fraud, embezzlement and criminal association.

A jury in New York, United States, reached this decision after a five-week trial, and Bankman-Fried will now face a sentence of up to 110 years in prison.

In their closing arguments, prosecutors portrayed the defendant as an extremely intelligent man consumed by greed who knew what he was doing when FTX money was secretly funneled into his personal hedge fund.

“Find him guilty,” U.S. Attorney Danielle Sassoon told the jury Thursday. “He was ambitious” and had “the arrogance to think he could get away with fraud,” she added.

The defense asserted that their client acted in “good faith” and was overwhelmed by circumstances and the financial ineptitude of close associates who allegedly testified against him to obtain leniency from prosecutors.

The star witness was Bankman-Fried’s ex-colleague and ex-girlfriend, Caroline Ellison, who told the jury that they had stolen “around US$14 billion” (RS69.4 billion) from customers of the trading platform. cryptocurrencies FTX before it went into bankruptcy last year.

The money was used to support Alameda Research, Bankman-Fried’s personal hedge fund, for which he chose Ellison as CEO

Bankman-Fried became a symbol of the cryptocurrency industry’s excesses last year when FTX collapsed and he was accused of stealing up to $10 billion from clients to fund political contributions, venture capital investments and other extravagant spending. .

The jury of nine women and three men took more than four hours of deliberation to reach a verdict. Bankman-Fried, 31, plans to appeal. The sentence will be handed down on March 28.

The decision marks one of the fastest downfalls in modern corporate history. Just a year ago, SBF, as he is known, had assets valued at more than US$20 billion and rose to prominence as one of the few “good guys” in the poorly regulated world of cryptocurrencies. FTX was valued at US$32 billion.

He founded FTX in 2019 and raised $2 billion in venture funding, promising to work with regulators to write new rules for the industry. He was also a prolific political donor, contributing more than $5 million to support Joe Biden’s 2020 presidential campaign.

Bankman-Fried has been charged with crimes including securities fraud, wire fraud and money laundering. A charge of violating campaign finance law was eventually dropped, along with some other charges, though all could be revived in a second trial next year.

Many of his closest allies turned against him. Caroline Ellison pleaded guilty and agreed to cooperate with the prosecution. She was joined by two FTX co-founders, Gary Wang and Nishad Singh, who admitted conspiring with Bankman-Fried to defraud customers. A fourth high-ranking executive, Ryan Salame, also pleaded guilty without agreeing to cooperate.

With The New York Times