Benzinga - The former Chief Executive Officer of FTX, Sam Bankman-Fried, has been convicted on seven counts of criminal fraud brought against him, as per a recent jury verdict.
What Happened: As CNBC disclosed, Bankman-Fried was found guilty on charges including wire fraud, conspiracy to commit wire fraud, securities fraud, commodities fraud, and money laundering. The conviction could lead to a maximum sentence of 115 years in jail for the 31-year-old former FTX chief.
The court proceedings commenced in early October, with several key witnesses including Bankman-Fried’s ex-girlfriend Caroline Ellison, former Alameda head, and Gary Wang, FTX co-founder. Both Ellison and Wang pleaded guilty to multiple charges, testifying as prosecution witnesses.
The jury was tasked with determining whether Bankman-Fried knowingly misappropriated customer funds from FTX for personal and business expenses. Assistant U.S. Attorney Nicolas Roos confirmed that $10 billion in customer funds had disappeared from FTX’s crypto exchange, which allowed users to trade Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) in addition to its own token FTX (FTT). The question at hand was whether Bankman-Fried was aware that his actions were illegal.
Bankman-Fried’s case has drawn comparisons to Elizabeth Holmes, Theranos founder, who was found guilty on four counts of investor fraud.
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Why It Matters: Prior to the verdict, Benzinga reported that Bankman-Fried was expected to plead not guilty to charges of wire fraud and conspiracy. A guilty verdict could result in decades-long imprisonment for the young entrepreneur. Prosecutors had to prove that emails were sent or an online tool was used to commit fraud, as stated by Withersworldwide attorney Martin Auerbach.
The guilty verdict is seen as a positive development for the integrity of the blockchain industry. As Benzinga quotes Wormhole Foundation’s Robinson Burkey, the trial of Bankman-Fried reflects another instance of a financial entity defrauding its users. The majority of the crypto industry is expected to welcome the outcome of Bankman-Fried’s conviction.
Photo via Shutterstock.
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