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A jury in New York convicted former cryptocurrency and financial trading services billionaire Sam Bankman Fried as guilty on all charges that he was facing. The conviction follows a high profile trial that saw Bankman-Fried surrender to authorities after initially being in the Bahamas. His firm, FTX, declared bankruptcy in November last year, and the trial became an example of swift justice. The former executive’s fate is now in a jury’s hands, which is set to decide how long to sentence him.
Bankman-Fried’s Legal Trouble Far From Over As Alleged Foreign Bribery, Bank Fraud Trial Remains
Jury deliberations for today’s trial extended late into the evening as jurors announced their decision at 7:55 p.m. local time in New York. Their decision came after more than two weeks of testimony from former FTX management and those of its partner firm, Alameda Research. Alameda played a central role in FTX’s collapse, as did Caroline Ellison, its chief executive.
Ms. Ellison became a witness for the prosecution, joining more than a dozen others, including former employees, FBI officials, a professor and an investor. Bankman-Fried provided most of the testimony in his defense. His and FTX’s collapse, particularly due to the significant amount of customer funds involved, received widespread media coverage and drew coverage with the tragic Wall Street Ponzi scheme run by Bernie Madoff.
FTX’s former chief technology officer Gary Wang and head of engineering Nishad Singh both pleaded guilty and entered into agreements with prosecutors to lighten their jail sentences in return for testimony against Bankman-Fried. Wang’s testimony saw him admit that changes made to FTX’s software code enabled Alameda to use as much as a whopping $65 billion in customer funds for its quantitative trading strategies. During the trial proceedings, the defense argued that the pair were falsely implicating Bankman-Fried to reduce their jail time.
The prosecution’s star witness, however, was Ellison. Reminding one of the relationships between former healthcare technology executive Elizabeth Holmes and her firm’s president and chief operating officer, Ramesh Balwani. During the trial, Ellison described her romantic relationship with Bankman-Fried as “on” and “off,” sharing that the former FTX boss saw no use for her after the alleged fraud became public knowledge.
According to her, Bankman-Fried thought she was responsible for Alameda’s wrong bets in August 2022. She even accused him of asking her to produce fraudulent financial documents to submit to lenders.
Bankman-Fried’s lawyer characterized the prosecution’s case as attempting to paint his client as a villain in a fiction movie. The cryptocurrency crash of 2022 was the primary reason behind FTX’s collapse, according to the defense. Still, it appears that the jury was unconvinced due to Bankman-Fried’s resounding conviction on all seven charges.
He is expected to stay at the Manhattan Detention Center until the outcome of his second case is decided. Like the financial crime charges part of today’s case, the second case is part of the initial set of charges brought against him. However, prosecutors decided to try some of the charges in March 2024, and this case is more global.
The charges are post extradition, and rather striking in nature as some of the accusations involve Bankman-Fried paying $40 million to Chinese officials. FTX and Alameda’s accounts had been frozen in China, and according to prosecutors, Bankman-Fried transferred millions of dollars in cryptocurrency to regain access to the money. The money was used to fund losses from Alameda’s trading strategies, alleges the case,