NEW YORK, Nov 2 (Reuters) – FTX founder Sam Bankman-Fried was discovered responsible on Thursday of stealing from prospects of his now-bankrupt cryptocurrency alternate in a single of the largest monetary frauds on file, a verdict that cemented the 31-year-old former billionaire’s fall from grace.
A 12-member jury in Manhattan federal courtroom convicted Bankman-Fried on all seven counts he confronted after a monthlong trial wherein prosecutors made the case that he looted $8 billion from the alternate’s customers out of sheer greed.
The decision got here simply shy of one 12 months after FTX filed for chapter in a swift corporate meltdown that shocked monetary markets and erased his estimated $26 billion private fortune.
The jury reached the decision after simply over 4 hours of deliberations. Bankman-Fried, who had pleaded not responsible to 2 counts of fraud and 5 counts of conspiracy, stood going through the jury together with his fingers clasped in entrance of him as the decision was learn.
The conviction was a victory for the U.S. Justice Division and Damian Williams, the highest federal prosecutor in Manhattan, who made rooting out corruption in monetary markets one of his prime priorities.
“The crypto trade is perhaps new, the gamers like Sam Bankman-Fried could also be new, however this sort of fraud is as previous as time and we now have no persistence for it,” Williams instructed reporters exterior the courthouse.
As soon as the darling of the crypto world, Bankman-Fried – who was recognized for his mop of unkempt curly hair and for carrying shorts and T-shirts fairly than enterprise apparel – joins the likes of admitted Ponzi schemer Bernie Madoff and “Wolf of Wall Road” fraudster Jordan Belfort as notable individuals convicted of main U.S. monetary crimes.
U.S. District Decide Lewis Kaplan set Bankman-Fried’s sentencing for March 28, 2024. The Massachusetts Institute of Know-how graduate might face many years in jail.
His protection lawyer Mark Cohen stated in an announcement that he was “disenchanted” however revered the jury’s resolution.
“Mr. Bankman-Fried maintains his innocence and can proceed to vigorously combat the fees towards him,” he stated.
After Kaplan left the courtroom, Cohen put his arm round Bankman-Fried as they spoke on the protection desk.
As Bankman-Fried was led away by members of the U.S. Marshals service, he circled and nodded at his mother and father, the Stanford Regulation College professors Joseph Bankman and Barbara Fried, who have been seated within the courtroom viewers’s entrance row. Fried regarded towards him and crossed her arm throughout her chest.
Bankman-Fried is ready to go on trial subsequent March on a second set of fees introduced by prosecutors earlier this 12 months, together with for alleged overseas bribery and financial institution fraud conspiracies.
BANKMAN-FRIED TESTIFIED IN OWN DEFENSE
Bankman-Fried’s was the primary of a number of blockbuster instances Williams introduced towards former high-flying cryptocurrency executives to go to trial. A number of crypto firms went bankrupt final 12 months after the costs of bitcoin and different digital belongings collapsed following a years-long growth.
Prosecutors argued through the trial that Bankman-Fried siphoned cash from FTX to his crypto-focused hedge fund, Alameda Analysis, regardless of proclaiming on social media and in tv ads that the alternate prioritized the protection of buyer funds.
Alameda used the cash to pay its lenders and to make loans to Bankman-Fried and different executives – who in flip made speculative enterprise investments and donated upwards of $100 million to U.S. political campaigns in a bid to advertise cryptocurrency laws the defendant seen as favorable to his enterprise, in accordance with prosecutors.
Bankman-Fried took the calculated danger of testifying in his personal protection over three days close to the shut of trial after three former members of his inside circle testified towards him. He confronted aggressive cross-examination by the prosecution, typically avoiding direct solutions to essentially the most probing questions.
He testified that whereas he made errors working FTX, similar to not formulating a risk-management group, he didn’t steal buyer funds. He stated he thought Alameda’s borrowing from FTX was allowed and didn’t understand how massive its money owed had grown till shortly earlier than each firms collapsed.
“We thought that we would have the ability to construct one of the best product in the marketplace,” Bankman-Fried testified. “It turned out mainly the alternative of that.”
‘HE THOUGHT THE RULES DID NOT APPLY’
Prosecutors had a distinct view.
“He did not cut price for his three loyal deputies taking that stand and telling you the reality: that he was the one with the plan, the motive and the greed to raid FTX buyer deposits – billions and billions of {dollars} – to present himself cash, energy, affect. He thought the principles didn’t apply to him. He thought that he might get away with it,” prosecutor Danielle Sassoon instructed the jury on Thursday.
The jury heard 15 days of testimony. Former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, testifying for the prosecution after coming into responsible pleas, stated he directed them to commit crimes, together with serving to Alameda loot FTX and mendacity to lenders and traders concerning the firms’ funds.
The protection argued the three, who haven’t but been sentenced, falsely implicated Bankman-Fried in a bid to win leniency at sentencing. Prosecutors might ask Kaplan to take their cooperation into consideration in deciding their punishment.
Bankman-Fried has been jailed since August after Kaplan revoked his bail, having concluded he seemingly tampered with witnesses.
Reporting by Luc Cohen and Jody Godoy in New York; Enhancing by Will Dunham, Daniel Wallis and Lincoln Feast
Our Requirements: The Thomson Reuters Trust Principles.
Sam Bankman-Fried convicted of multi-billion dollar FTX fraud www.reuters.com 2023-11-03 01:08:16
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