- Crypto
- November 3, 2023
- 3 minutes read
FTX Founder Sam Bankman-Fried Convicted For Exchange’s Collapse
Sam Bankman-Fried, the founder of the collapsed crypto exchange FTX, has been convicted for his role in the exchange’s failure.…
Sam Bankman-Fried, the founder of the collapsed crypto exchange FTX, has been convicted for his role in the exchange’s failure. A jury found Bankman-Fried guilty of all seven counts of fraud and conspiracy following a monthlong trial in a Manhattan federal court.
Bankman-Fried faces many decades in jail, as determined by the federal judge overseeing the case. Sentencing has been set for March 28, 2024.
- FTX filed for bankruptcy in November 2022 after failing to redeem customer withdrawals. Prosecutors said Bankman-Fried and fellow FTX executives withdrew $8bn in customer funds and spent it on personal investments, luxury real estate, and political donations. The funds were transferred to Alameda Research, a hedge fund founded by Bankman-Fried, and disbursed for personal use.
The U.S. government indicted Bankman-Fried and four other executives for fraud and conspiracy, including technology chief Gary Wang, engineering director Nishad Singh, Alameda chief executive Caroline Ellison, and Ryan Salame, chief executive of an FTX subsidiary. They all pled guilty, and all except Salame agreed to cooperate with prosecutors in the case against Bankman-Fried. The three defendants testified against Bankman-Fried during the monthlong trial.
Bankman-Fried pled not guilty and sought to defend his case in court. He was initially released on a highly restrictive $250mn bond package until a judge revoked his bail this August; prosecutors said Bankman-Fried attempted to contact witnesses and influence his trial’s outcome.
Wang, Singh, Ellison, and Salame are currently released on bail, with sentencing set for next year.
- Bankman-Fried isn’t done with the courts. He has another federal trial next year on four criminal counts, including bank fraud and bribery conspiracy. The government has until February 1, 2024, to notify the court if it plans to proceed with the case.
- Bankman-Fried will be remanded at the New York Metropolitan Detention Center pending sentencing.
FTX is under bankruptcy proceedings led by a new chief executive, John J. Ray III, a prominent bankruptcy attorney who previously chaired bankruptcy proceedings for infamous energy giant Enron. FTX said it had recovered $7.3bn in liquid assets of the $8.7bn owed to customers as of June 2023.
