• Friday, May 24, 2024
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Crypto founder Sam Bankman-Fried convicted of high-stakes fraud

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In a stunning turn of events, FTX founder Sam Bankman-Fried, once a prominent figure in the cryptocurrency industry, has been convicted of fraud in a New York courtroom.

This dramatic downfall comes after a tumultuous journey that saw Bankman-Fried testifying before Congress, running a Super Bowl advertisement, and harbouring ambitions of a presidential run.

After a month-long trial, a New York jury decisively rejected Bankman-Fried’s claims that he had never engaged in fraud or intended to deceive customers.

This verdict deals a severe blow to the man who had been at the helm of FTX, once one of the world’s largest cryptocurrency exchanges, which ultimately collapsed into bankruptcy a year ago.

The Courtroom Drama

In the courtroom of Manhattan federal court, Judge Lewis A. Kaplan solemnly addressed Bankman-Fried just before the jury forewoman delivered the verdict: “Mr. Bankman-Fried, please rise and face the jury.”

The response was a resounding “guilty” on seven counts, including two wire fraud charges, two wire fraud conspiracy charges, and three other conspiracy charges.

The potential penalties could add up to a staggering 110 years in prison, although Bankman-Fried is likely to receive a far lesser sentence at the hearing scheduled for March 28.

As the guilty verdict was read, Bankman-Fried appeared shocked and remained stoic, with his hands clasped before him. He sat down, looking down for several minutes.

His lawyer, Mark Cohen, later read a statement outside the courtroom, expressing their respect for the jury’s decision while conveying deep disappointment. Cohen stated, “Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him.”

Read also: How Bankman-Fried embarked on $1 billion spending spree to save crypto firms

The prosecutor’s perspective

U.S. Attorney Damian Williams, who had been present in the courtroom during the verdict, addressed the media outside the courthouse.

Williams described Bankman-Fried’s actions as “one of the biggest financial frauds in American history,” a multibillion-dollar scheme aimed at making him the “king of crypto.”

He stressed that the cryptocurrency industry might be relatively new, and its players like Sam Bankman-Fried might be recent entrants, but fraud and corruption are age-old issues, and they will not be tolerated.

Williams emphasised that this case should serve as a stern warning to other fraudsters who believe they are untouchable or their crimes too complex to prosecute. He vowed that there would be enough handcuffs for all of them, and no one would escape justice.

The Verdict and Emotional moments

The jury’s decision effectively rejected Bankman-Fried’s assertions that he had no knowledge of committing fraud or orchestrating theft from customers, investors, and lenders. His claims that he was unaware of his company’s accumulating $10 billion debt until October 2022 were not accepted.

In the emotional aftermath of the verdict, Bankman-Fried’s parents, both law professors at Stanford University, moved to the front row behind him.

His father offered support to his wife, and Bankman-Fried exchanged a nod with his mother before being led out of the courtroom.

The trial’s high-profile nature and the massive scale of the fraud allegations drew intense interest, paralleling cases like Bernard Madoff’s 2009 prosecution, whose Ponzi scheme defrauded thousands of investors of approximately $20 billion.

Madoff, who pleaded guilty, was sentenced to 150 years in prison and passed away in 2021, leaving a legacy of financial deception.