It took a jury just four hours to find “crypto king” Sam Bankman-Fried guilty of fraud.
The 31 year old man has been condemned to steal billions of dollars from customers of FTX, which was the world’s second-largest crypto exchange before its dramatic collapse last year.
To this day, FTX users – at least 80,000 in the UK – still haven’t had to pay as the company’s new management scrambles to find out where the money went.
During the trial, three members of Bankman-Fried’s inner circle testified – executives with direct insight into how the doomed company was run.
Caroline Ellison, his on-again, off-again girlfriend and CEO of sister trading company Alameda Research who helped lead to FTX’s downfall, said it was a “relief” when the company went bankrupt.
FTX co-founder Gary Wang said Alameda Research was allowed to withdraw an unlimited number of funds belonging to clients from the exchange without their knowledge – to finance risky bets and extravagant purchases.
And Nishad Singh, who was head of engineering at FTX, revealed that Bankman-Fried spent almost £1 billion on celebrity endorsements, high-profile partnerships and lavish real estate – further fueling the illusion of success.
That trio had all reached plea deals before the trial began, but Bankman-Fried has no such luxury — and faces up to 115 years in prison when he is sentenced in March.
The verdict marks a huge disgrace for a young entrepreneur once considered the white knight of the crypto industry – a man who swept away and rescued struggling companies from the brink of bankruptcy.
And the consequences of FTX’s dramatic implosion were felt far beyond the crypto sector.
US President Joe Biden has come under pressure to return millions of dollars donated by Bankman-Fried to his presidential campaign.
A coterie of A-list celebrities – including Larry David and Naomi Osaka – face prosecution after endorsing FTX in high-profile advertisements. Taylor Swift almost got caught up in the debacle, but luckily for her, a $100 million sponsorship deal was struck at the last minute.
Bankman-Fried had also advised politicians in Washington on how the crypto industry should be regulated, advocating for rules that his own firm reportedly found impossible to follow.
And rather awkwardly, just months before FTX’s bankruptcy, he rubbed shoulders with Tony Blair and Bill Clinton at an exclusive event in the Bahamas.
Blockworks Opinion Editor Molly Jane Zuckerman said: “With his belief, Bankman-Fried and crypto will now unfortunately be synonymous for the rest of eternity.
“It’s inescapable: the young genius founder who promised to change the financial world has been found guilty of seven counts… one year to the day after the original press article that brought down his empire .”
For years, crypto has been viewed cynically by politicians, regulators and the public – overlooked as a form of monopoly currency because it is notoriously volatile.
But digital assets had begun to gain momentum because of the way they lowered the cost of international transactions and provided protection to consumers in countries suffering from hyperinflation.
Who is Sam Bankman-Fried?
Sam Bankman-Fried has done irrevocable damage to this industry, reinforcing the narrative of a Wild West where consumers have no protections.
It will take years for the crypto world to rehabilitate its image, if ever.
For what? Because the millions of people who were early adopters – true believers in what this new asset class could achieve – were badly burned by FTX.
And if you can’t trust the world’s second largest cryptocurrency exchange, who can you trust?