Former FTX CEO Sam Bankman-Fried has been found guilty of seven counts of fraud and conspiracy, a landmark verdict that marks the fall of a once-billionaire figurehead in the volatile crypto world. In the wake of FTX’s collapse last year, an estimated one million customers were left facing potential losses, shaking the trillion-dollar crypto industry to its core.
Not too long ago, FTX was a darling for many, boasting an impressive user base and high-profile endorsements from celebrities like former NFL superstar Tom Brady, NBA star Stephen Curry, tennis phenom Naomi Osaka, former baseball superstar David “Big Papi” Ortiz, and Shark Tank’s Kevin O’Leary.
Before we dive into the details, I want to take a moment to give you a bit of context about this podcast and the person behind it. My name is Mitch Jackson, and I’m a trial lawyer and private mediator with over 30 years of experience. In each podcast episode, I help you navigate the new and sometimes confusing dynamic digital landscape found at the intersection of law, business, and technology. And as I’m doing in this episode, I also like to share my take on breaking stories relating to web3, AI, and other trending technologies.
OK. Ready to get started?
Let’s now dive in and dissect the crimes Sam Bankman-Fried was found guilty of committing.
The charges span a range of alleged crimes against different victim groups, including FTX’s customers and sister company Alameda Research’s lenders, with an additional money-laundering charge adding to the severity of the case.
Focusing on the crimes against FTX customers, count one highlights wire fraud, a term for the use of electronic communications in facilitating criminal activity. The government claimed and proved that Bankman-Fried actively participated in schemes to defraud customers.
Count two adds an element of conspiracy, with Bankman-Fried colluding with three government witnesses who have since pleaded guilty in hopes of a reduced sentence.
Count six brings in commodities fraud, involving the sale of cryptocurrencies under the watchful eye of the US Commodity Futures Trading Commission.
When it comes to crimes against lenders, counts three and four mirror counts one and two but pertain specifically to lenders who provided capital to Alameda Research.
Count five accused and found Bankman-Fried guilty of making false statements about the financial ties between FTX and Alameda Research to deceive investors.
And if that’s not enough, yes, there’s more.
It was alleged and proven that cover-ups happened. In fact, count seven alleged that Bankman-Fried was involved in money laundering operations to conceal the illicit origins of funds obtained through embezzlement or gambling.
So what’s going to happen next?
Bankman-Fried now awaits his sentencing, scheduled for March 28, from the confines of a federal jail in Brooklyn. Looking at these convictions and if I had to guess, I’d say he’s looking at 20-30 years in prison. In the end, the length of Bankman-Fried’s sentence will come down to the judge.
As the dust settles, the legal, business, and investment communities will closely watch how this case unfolds and its implications for the crypto and investment industries as a whole.
The outcome of this trial will set a precedent for future cases in this emerging field, underscoring the need for robust legal frameworks to regulate cryptocurrencies and protect investors and customers alike. It is a stark reminder for business owners, entrepreneurs, and legal professionals to remain vigilant, stay informed, and always seek out the help of professionals to do your due diligence.
The Web3, AI and Metaverse Legal and Business Podcast
Episode page: https://mitchjackson.com/podcast
Listen on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-web3-ai-and-metaverse-legal-and-business-podcast/id1257596607
Breaking: Sam Bankman-Fried (FTX) Guilty of Wire Fraud, Conspiracy, and Money Laundering: https://open.spotify.com/episode/65u8BgPD4qnV2AzoCNg3nN?si=a_cq3jfWRbK9gYYI54PrBg