Image: © Ascannio/Stock.adobe.com
After FTX collapsed last year, Bankman-Fried was accused of secretly transferring $10bn of customer funds to his trading company Alameda.
Sam Bankman-Fried, the founder of bankrupt crypto exchange FTX, has been found guilty in one of the biggest fraud cases in history.
The former CEO was found guilty of all seven charges brought against him, according to various court reporters. These charges include conspiracy to commit wire and commodities fraud on FTX customers and investors, along with conspiracy to commit money laundering.
Two of the charges include wire fraud and conspiracy to commit wire fraud on lenders of Alameda Research, a crypto-focused trading firm that was also founded by Bankman-Fried. Some of the listed charges have maximum sentences of 20 years in prison.
Speaking after the trial to reporters, US attorney Damian Williams said that Bankman-Fried “perpetrated one of the biggest financial frauds in American history”.
“A multibillion-dollar scheme designed to make him the king of crypto,” Williams said. “The cryptocurrency industry might be new. The players like Sam Bankman-Fried might be new. But this kind of fraud, this kind of corruption is as old as time.”
Bankman-Fried continues to argue that he is innocent and will fight the charges against him, according to a statement from his lawyer shared by The Guardian.
How did this all begin?
Bankman-Fried – also known as SBF – founded FTX in 2019 and gathered a positive personal reputation in the following years. His crypto exchange also became popular, with more than 1m users on its mobile and desktop platforms at its peak and earning more than $1bn in revenue in 2021.
But last year, a CoinDesk article claimed the balance sheet of Alameda held billions of dollars worth of FTX’s cryptocurrency, known as FTT. After this, companies like Binance announced that it was selling its FTT holdings, which sparked an exodus as customers quickly tried to withdraw their holdings.
This surge caused the value of FTX’s coin to plummet, with estimates that $6bn of withdrawals took place over 72 hours. FTX filed for bankruptcy on 11 November and owed billions to its top creditors.
After this, senior FTX sources claimed that Bankman-Fried had secretly transferred $10bn of customer funds from FTX to his trading company Alameda.
Bankman-Fried was arrested in the Bahamas in December 2022, the day before he was scheduled to testify before US Congress about the crypto exchange’s sudden collapse.
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