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21 July, 2024

Crypto 'wonder boy' Sam Bankman-Fried convicted in $8 billion fraud

Once the darling of the crypto world, Bankman-Fried was convicted today of looting his customer's accounts, adding to his $26 billion personal fortune


Sam Bankman-Fried, the former billionaire founder of FTX, a prominent cryptocurrency exchange, was found guilty on Thursday of orchestrating one of the most significant financial frauds in history. A 12-member jury at Manhattan federal court convicted Bankman-Fried on all seven counts, affirming that he looted a staggering $8 billion from FTX users out of sheer greed.

This verdict comes almost one year after FTX's abrupt bankruptcy, a shocking corporate meltdown that wiped out Bankman-Fried's estimated $26 billion personal fortune. Facing charges of two counts of fraud and five counts of conspiracy, Bankman-Fried, who had pleaded not guilty, stood in court as the jury delivered the verdict.

Once hailed as the darling of the crypto world, Bankman-Fried, known for his unconventional appearance and casual attire, now joins the ranks of notorious individuals like Bernie Madoff and Jordan Belfort, who were convicted of major U.S. financial crimes.

U.S. District Judge Lewis Kaplan has scheduled Bankman-Fried's sentencing for March 28, 2024, and the former MIT graduate could potentially face decades in prison. While Bankman-Fried's defense lawyer expressed disappointment with the verdict, they maintain his innocence and plan to vigorously contest the charges.

Furthermore, Bankman-Fried is set to face another trial next March, involving additional charges brought by prosecutors earlier this year, including alleged foreign bribery and bank fraud conspiracies.

The downfall of Sam Bankman-Fried and his cryptocurrency empire, valued at $32 billion, appears to have been ignited by a single tweet from his industry rival, Changpeng Zhao, the head of Binance.

In the days leading to the collapse of FTX and its affiliated firm, Alameda Research, Zhao took to Twitter to announce Binance's decision to sever ties with Bankman-Fried's ventures. Zhao cited "recent revelations" concerning FTX's financial health, alluding to leaked Alameda balance sheets that unveiled the precarious financial state of Bankman-Fried's businesses.

Zhao's announcement sent shockwaves throughout the crypto community. It prompted a mass exodus of funds from FTX as users desperately sought to withdraw their assets. However, FTX found itself unable to fulfill these withdrawal requests, resulting in an attempt by customers to withdraw a staggering $6 billion in just 72 hours.

This crisis exposed fraudulent practices at FTX, leading to Bankman-Fried facing legal charges less than a month later.

In earlier news, Changpeng Zhao visited Cyprus last year and was interviewed by KNews on the subject of the financial scandal and his plans to set up shop in Cyprus.

According to the Binance founder, the FTX bankruptcy scandal was no trivial matter and "rocked the entire crypto world to its core" and was a major detriment to the industry as a whole.

The co-founder of Binance, the world's largest cryptocurrency trading platform that offers crypto-to-crypto trading in more than 600 cryptocurrencies and virtual tokens, Zhao, or CZ as he's referred to, is ranked as the 30th richest person in the world by the Bloomberg Billionaires Index. His estimated net worth was set at $33 billion as of October 2022.

[Information from Reuters, Daily Mail UK and KNews]

Cyprus  |  USA  |  crypto  |  Binance

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