In one of the most incredible falls from grace recently, Sam Bankman-Fried, known as the “King of Crypto,” received a guilty verdict on the accounts of fraud and money laundering on November 3 in New York.
The trial, which has seen a former billionaire found guilty, has lasted a little over four weeks, with the jury only needing less than five hours to deliver its final guilty verdict in this infamous case, with sentencing set to be delivered on March 28 next year.
Bankman-Fried has been found guilty of stealing over $8 billion in customer funds when his cryptocurrency exchange fund declared bankruptcy in November last year. At one point, FTX was valued at over $32 billion, making him a billionaire who now faces potential decades in jail.
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“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history – a multibillion-dollar scheme designed to make him the king of crypto,” US attorney Damian Williams said in a statement after the verdict.
In his testimony, Bankman-Fried said, “I had absolutely no idea how they worked…I just knew they were things you could trade. There was a ton of excitement, a ton of demand…”
Alameda Research involvement
The prosecution presented evidence that Bankman-Fried’s crypto trading firm, Alameda Research, received deposits from FTX customers since the early days of the exchange when banks wouldn’t let it open an account.
In court, Bankman-Fried said that the transfers between his firms were “permissible” and testified that he wasn’t aware of the financial loophole described by his deputies, who testified against him, until a few weeks before FTX’s collapse last year.
He now faces potentially 110 years in prison as five of the charges he was found guilty of carries a maximum prison term of 20 years, with a five-year maximum on the other two charges.
What is next for Crypto?
Despite the bankruptcy of FTX and predictions of cryptocurrency’s downfall, there is still a market for virtual assets.
The price of Bitcoin (BTC) has more than doubled this year, and even FTX may be back in contention with recent reports of a plan to reimburse its customers who lost money and negotiations with bidders to relaunch its trading services.
