New York (Reuters) – In the fraud trial against Sam Bankman-Fried, the jury found the founder of the collapsed crypto exchange FTX guilty on Thursday (local time) in New York.
The jury found it proven that the 31-year-old had embezzled eight billion dollars in customer money out of pure greed in order to speculate and finance his lavish lifestyle.
This means that the former star of the crypto scene will probably be mentioned in the same breath as other convicted fraudsters such as Bernie Madoff or Jordan Belfort. The latter served as a model for the film “Wolf of Wall Street”. Bankman-Fried, who is known for appearing in jeans and a T-shirt as well as for his distinctive tousled hair, is facing decades in prison. He could also be ordered to pay damages. Judge Lewis Kaplan plans to announce the sentence on March 28, 2024.
VERDICT AFTER FOUR HOURS OF CONSULTATION
The twelve jurors made their decision after just four hours of deliberations and found Bankman-Fried guilty on all seven counts. He faced the jury with his hands folded in front of him as the verdict was read out. “The crypto industry may be new, the players like Sam Bankman-Fried may be new, but this type of fraud is ancient and we have no mercy,” chief prosecutor Damien Williams said at a subsequent press conference.
Bankman-Fried’s defense attorney Mark Cohen said he was “disappointed” by the decision, which he respected. “Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the allegations against him.” Shortly after the verdict, Cohen put his arm around the defendant before he was led away. As he walked, Bankman-Fried nodded to his parents, Professors Joseph Bankman and Barbara Fried, who were present in the hall.
The FTX founder had to go back to his cell, where he has been sitting since August. At that time, the court had converted his house arrest into pre-trial detention because he had influenced witnesses. He is scheduled to stand trial again next March on charges of alleged bank fraud, conspiring to make illegal party donations and bribing Chinese officials.
TRUST CRISIS ACROSS THE CRYPT INDUSTRY
In the current proceedings, three former close confidants of Bankman-Fried had incriminated him. “He did not expect his three loyal deputies to take the stand and tell the truth: that he was the one who had the plan, the motive and the greed to plunder the deposits of FTX customers – billions and billions “to gain money, power and influence,” said prosecutor Danielle Sassoon at the end of the evidence. “He thought he could get away with it.” During his interrogation, Bankman-Fried admitted to entrepreneurial errors, but denied the accusation of fraud.
FTX customers can expect a portion of their deposits to be paid out. The insolvency administrator has so far been able to secure assets worth seven billion dollars and is trying in court to collect further money from the crypto exchange’s former business partners. At least 90 percent of this sum should be paid out to the injured parties.
The FTX bankruptcy a year ago dealt a further blow to the already weakened mood of the crypto industry and dragged some companies into the abyss. The prices of cryptocurrencies such as Bitcoin and Ethereum also plummeted. They are only recovering slowly and are still far from their record highs.
(Report by Jody Godoy and Luc Cohen; written by Hakan Ersen and Alexandra Falk, edited by Hans Seidenstücker. If you have any questions, please contact our editorial team at [email protected] (for politics and economics) or frankfurt.newsroom@ thomsonreuters.com (for companies and markets).)