Former billionaire Sam Bankman-Fried was found guilty on Thursday of defrauding customers of his now-bankrupt cryptocurrency exchange.
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In Manhattan federal court, a 12-member jury found Bankman-Fried guilty on all seven counts, according to Reuters. Bankman-Fried was accused of stealing $8 billion from FTX’s consumers to become wealthy, leading to headlines during the month-long trial. The verdict was handed down a year after FTX declared bankruptcy, wiping out the 31-year-old’s $26 billion wealth, according to the publication.
The plan was regarded as one of the largest financial scams in recorded history. The prosecution contended that Bankman-Fried transferred cash from FTX to his hedge fund with a cryptocurrency focus, Almeda Research, and attempted to reassure users through marketing that the exchange placed a high priority on the security of their money.
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During the trial, he testified in his defense after three members of his close circle testified against him and avoided direct questions from prosecutors. Bankman-Fried admitted to making mistakes while running FTX, like not operating a risk management team, but didn’t steal from customers. He thought he was allowed to borrow from FTX to fund Almeda but didn’t realize how significant its debt was until both companies collapsed.
Alameda Research was a quantitative cryptocurrency trading firm co-founded in September 2017 by Sam Bankman-Fried and Tara Mac Aulay. The firm was based in Hong Kong and traded thousands of digital asset products, including all significant coins and altcoins, as well as their derivatives. Alameda Research used internally developed technology and a team of experienced traders to make markets and execute trades on exchanges worldwide. Alameda Research was one of the largest and most successful cryptocurrency trading firms in the world. It was known for its innovative trading strategies and ability to generate profits in a volatile market. The firm also played a significant role in the growth of the cryptocurrency industry by providing liquidity and market depth.
In November 2022, Alameda Research filed for Chapter 11 bankruptcy with its sister company, FTX, a cryptocurrency exchange. The default resulted from a liquidity crisis at FTX, which a combination of factors, including a decline in the cryptocurrency market and risky bets by Alameda Research, caused.
