Former cryptocurrency entrepreneur Sam Bankman-Fried has been convicted in his fraud trial. A jury in New York found him guilty on seven counts. The sentence will not be decided until March 2024 – it could be more than 100 years in prison.
After graduating from university, Bankman-Fried was hired as a cryptocurrency trader at the Jane Street brokerage firm. He made a fortune by betting on Bitcoin price differences on exchanges in the USA and Asia. In 2017 he set up his own brokerage firm Alameda, and in 2019 he founded the crypto exchange FTX. Their collapse at the end of 2022 shocked the crypto industry.
The US justice system accuses the 31-year-old of having diverted billions from the assets of FTX customers without their knowledge in order, among other things, to finance risky transactions by his hedge fund Alameda Research. When these deals went wrong, FTX was also caught in the vortex. According to the indictment, Bankman-Fried is said to have ensured that Alameda was able to borrow money from FTX without providing the usual collateral. He himself shrugged off responsibility in court and referred to the decisions of others. However, he admitted mistakes in the company’s management.
“This was a pyramid of fraud that the defendant built on a foundation of lies and false promises just to get money,” prosecutor Nicolas Ross said in his closing argument. “He had the arrogance to think he could get away with it.”