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3 Nov, 2023 02:53

Disgraced FTX founder convicted of fraud

Former US billionaire Sam Bankman-Fried now faces a second trial for bribery and bank fraud charges
Disgraced FTX founder convicted of fraud

FTX founder Sam Bankman-Fried has been found guilty on seven counts of fraud and conspiracy linked to his ill-fated cryptocurrency exchange and a related hedge fund.

The verdict, delivered on Thursday evening by a New York federal jury, is likely to land the former tycoon a decades-long prison sentence. 

The one-time billionaire was charged with bilking customers out of some $8 billion and lying to investors.

Jurors returned the verdict after more than two weeks of testimony and four hours of deliberations. US Attorney Damian Williams praised the decision in a statement after the hearing, saying the government had “no patience” for white-collar crime.

“These players like Sam Bankman-Fried might be new, but this kind of fraud, this kind of corruption, is as old as time,” Williams added.

Bankman-Fried was arrested last December on a long list of fraud charges after his once-successful crypto exchange, FTX, abruptly filed for bankruptcy. Prosecutors said he embezzled $8 billion in customer money to make investments, buy real estate, and make up for losses at a separate hedge fund, among other things, for which he faced one count of wire fraud, two counts of conspiracy to commit fraud, and one count of money laundering conspiracy.

The government also alleged that Bankman-Fried had borrowed large sums of money from FTX on behalf of his hedge fund, Alameda Research, and lied to auditors about the firm’s risk management. The fund’s former chief executive and Bankman-Fried’s ex-girlfriend, Caroline Ellison, has faced separate charges for her alleged role in the scheme, and testified against Bankman-Fried during his trial.

Bankman-Fried’s lead defense attorney, Mark Cohen, said he was “disappointed” in Thursday’s verdict, but added “We respect the jury’s decision.”

“Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him,” he added. The defendant pleaded not guilty to all charges at the start of the trial.

The one-time crypto billionaire will be sentenced on March 28, and could begin a second trial for five additional charges around the same time. The government has until February 1 to determine if it will proceed with that case, which includes additional counts for fraud, as well as bribery.