‘Crypto King’ Sam Bankman-Fried convicted of FTX fraud

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In a New York courtroom, Sam Bankman-Fried, the former head of one of the world’s largest cryptocurrency exchanges, has been found guilty of fraud and money laundering following a month-long trial. The jury’s swift verdict, reached in less than five hours of deliberation, marks a dramatic downfall for the 31-year-old former billionaire and a prominent figure in the crypto industry.

Bankman-Fried, who was arrested after his firm FTX faced bankruptcy, now faces the prospect of a lengthy prison sentence. His sentencing is scheduled for March 28 next year. The US attorney, Damian Williams, labeled Bankman-Fried’s actions as “one of the biggest financial frauds in American history,” involving a multibillion-dollar scheme to establish himself as the “king of crypto.”

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Prosecutors accused Bankman-Fried of deceiving investors and lenders while embezzling billions from the cryptocurrency exchange FTX, which contributed to its collapse. He faced seven counts of fraud and money laundering, to which he pleaded not guilty, asserting that he acted in good faith despite making mistakes.

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After the verdict, Bankman-Fried’s lawyer expressed disappointment with the outcome but affirmed his client’s determination to fight the charges. It remains unclear whether an appeal will be pursued.

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Notably, three of Bankman-Fried’s former associates, including his ex-girlfriend Caroline Ellison, pleaded guilty and agreed to testify against him in the hope of reducing their own sentences.

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The prosecution presented evidence indicating that Bankman-Fried’s company, Alameda Research, received deposits on behalf of FTX customers when traditional banks refused to open accounts for the exchange. Instead of safeguarding these funds, he diverted the money for repaying Alameda lenders, purchasing property, making investments, and political donations.

The guilty verdicts carry maximum prison terms of 20 years for five of the charges and a maximum of five years for the remaining two, potentially totaling a maximum sentence of 110 years, although the actual sentence is expected to be significantly shorter.

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Bankman-Fried’s trial held significant implications for the cryptocurrency industry, which has grappled with challenges and regulatory scrutiny following market turbulence in the previous year. He had been a prominent figure and was known as the “king of crypto” due to the rapid growth of FTX and his high-profile dealings. With the absence of immediate regulatory changes for cryptocurrencies, legal battles and civil cases involving regulatory agencies like the SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission) are expected to persist in US courts.

Source: BBC News

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