Arrogant fraudster or inexperienced young entrepreneur?
Prosecutor Danielle Sassoon has Bankman-Fried, according to CNBC described as a reprehensible person [Article on English], who had the “arrogance” to “get away with his fraud”.
The opposing lawyers argued that Bankman-Fried was an inexperienced young entrepreneur who acted in good faith made entrepreneurial errors that were not criminally relevant [Article on English]. However, this contrasts with statements about Bankman-Fried, according to which he is said to have instructed other people to carry out criminal acts.
Ultimately, at the end of the five-week trial, the jury followed the prosecution's descriptions and Bankman-Fried was convicted of two counts of fraud and five counts of conspiracy.
Damian Williams, also a prosecutor in the FTX trial against Sam Bankman-Fried, also seemed satisfied with the verdict:
The crypto industry may be new, the players like Sam Bankman-Fried may be new, but this type of fraud is not new and we will not tolerate it. – Damian Williams, prosecutor in the FTX trial, source: Reuters
Bankman-Fried has been in prison since August because a judge did not release him on bail. There were fears that Bankman-Fried might plan to bribe important witnesses.
This is how the FTX bankruptcy happened
In November 2022, irregularities became known at the crypto exchange FTX, which was then the largest trading venue for well-known cryptocurrencies such as Bitcoin or Ethereum. Sam Bankman-Fried is said to have used deposited customer funds to finance his hedge fund Alameda Research with unsecured loans.
Perhaps Bankman-Fried's machinations would not have been noticed if price losses in the major cryptocurrencies had not led to many customers withdrawing their deposits from FTX.
However, the crypto exchange did not have the financial resources to pay out customers. In this context, it became clear that FTX did not manage the cryptocurrencies in trust, but had transferred them without the knowledge of their customers.
Even though the equivalent of around 5 billion euros was later secured, many of FTX's creditors had to accept high losses.
The sentence is still pending, but Bankman-Fried could currently face up to 110 years in prison. However, his lawyers are expected to file an appeal. It remains to be seen whether this will lead to changes.
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