NEW YORK (AP) — Sam Bankman-Fried co-founded the FTX crypto alternate in 2019 and rapidly constructed it into the world’s second hottest place to commerce digital forex. It collapsed virtually as rapidly. By the autumn of 2022, it was bankrupt.
Prosecutors quickly charged Bankman-Fried with misappropriating billions of {dollars} in FTX buyer deposits. They mentioned he used the cash to prop up his hedge fund, purchase actual property, and try and affect cryptocurrency regulation by making marketing campaign contributions to U.S. politicians and pay $150 million in bribes to Chinese language authorities officers.
He was placed on trial within the fall of 2023.
WHAT DID HE DO WRONG?
FTX had two traces of enterprise: a brokerage the place prospects might deposit, purchase, and promote cryptocurrency belongings on the FTX platform, and an affiliated hedge fund often known as Alameda Analysis, which took speculative positions in cryptocurrency investments. As Alameda piled up losses throughout a cryptocurrency market decline, prosecutors mentioned Bankman-Fried directed funds to be moved from FTX’s buyer accounts to Alameda to plug holes within the hedge fund’s stability sheet.
Prosecutors mentioned Bankman-Fried, now 32, additionally created secret loopholes within the laptop code for the FTX platform that allowed Alameda to incur a multibillion-dollar detrimental stability that the hedge fund couldn’t repay, lied to a financial institution concerning the function of sure accounts it opened, evaded banking laws and bribed Chinese language officers in an try and regain entry to financial institution accounts that had been frozen in that nation throughout an investigation.
WHAT DOES BANKMAN-FRIED SAY?
In interviews and courtroom testimony, Bankman-Fried acknowledged making errors, however blamed among the wrongdoing on different executives at his firm, and mentioned he by no means meant to defraud anybody. He has additionally mentioned the alleged hurt to FTX’s prospects has been exaggerated.
THE VERDICT
Bankman-Fried was convicted in November 2023 of two counts of wire fraud conspiracy, two counts of wire fraud, one rely of conspiracy to commit cash laundering, conspiracy to commit commodities fraud and conspiracy to commit securities fraud.
He was sentenced to 25 years in jail 4 months later in late March 2024. The choose within the case additionally ordered him to forfeit over $11 billion.