Bloomberg News reports that a federal jury in Manhattan found that Sam Bankman Fried, the co-founder of FTX, was guilty of fraudulent activities defrauding the lenders, customers, and investors. This verdict concluded a dramatic downfall for the entrepreneur.
The Trial
The jury members engaged in the trial and allied conversations for several hours after the criminal trial of Sam Bankman Fried concluded on Thursday. The jury concluded that SBF was guilty of all seven criminal charges, from money laundering to wire fraud. Sam Bankman Fried’s sentencing is scheduled for March 28th. The count carried 110 years of imprisonment.
On hearing the verdict, Bankman remained stoic. He did not look at his parents. His father was dipping his head while his mother rubbed off her eyes.
Yet another Trial
Bankman is to face yet another legal accusation where it is alleged that he bribed Chinese officials and committed bank fraud. This trial is expected to be held in March.
What Did Prosecutors Argue?
The prosecutors have argued that Bankman Fried intentionally stole customer deposits worth $14 billion from the crypto exchange. The same was executed along with three other top executives in a scheme. The top 3 executives include FTX engineering director Nishad Singh, Alameda CEO Caroline Ellison, and co-founder of FTX Gary Wang.
All the top 3 executives were found guilty in the fraud charges following the collapse of FTX. They testified against SBF under plea contracts or agreements with the government.
As per the prosecutors’ claims, the group let sister crypto trading company Alameda Research backdoor access secretly to the deposits of FTX customers. After that, the money was spent on repayment of loans, real estate, investments, and political donations.
Prosecutor Nicolas Roos said that Sam Bankman Fried spent money on customers and lied to them about the same. He said this during the closing argument of the government.
Bankman Fried testified that it was not fraud but poor business decisions and screwups in the management were responsible for the state of affairs of the crypto exchange.
Bankman Fried, as a customer, argued that Alameda Research could borrow from deposits of FTX as long as the funds were in accounts that FTX’s margin trading program was opted for.
More on the Issue
However, the prosecutor argued that Bankman Fried, along with his top executives, was tinkering secretly with the computer code of FTX. It was so that Alameda Research could lay its hands on billions in customer funds. These transactions were characterized as so-called “borrows” or loans availed from FTX.
Not only that, the sister crypto trading firm was also allowed special incentives and privileges that were not made available to the other customer accounts. The loans extended to Alameda did not require any collateral and could also carry negative balances on the crypto exchange.
