CRYPTOCURRENCY
Sam Bankman-Fried trial: What are the charges against him and what will happen if he is convicted?
The former FTX chief has seven counts against him in what prosecutors have called one of the biggest frauds in history.
Sam Bankman-Fried, the former CEO of cryptocurrency empire FTX, will be appearing in court this week on charges of fraud and conspiracy.
FTX was founded in 2017 by Bankman-Fried and Gary Wang. Back in November 2022, FTX, then the second-largest cryptocurrency trading hub on the internet, was plunged into bankruptcy. Bankman-Fried lost his entire $16 billion fortune overnight according to Bloomberg’s analysis.
The collapse revealed a large number of irregularities in the financial governance of FTX with customers investments being sent to other companies to invest as well as billions of dollars missing from accounts.
Prosecutors are claiming that Bankman-Fried stole billions of dollars of customer funds, both for himself and to cover losses for his hedge fund Alameda Research. The former CEO that compant, Caroline Ellison, pleaded guilty to defrauding investors in FTX last year. A statement from prosecutors added that she was now cooperating fully with federal investigators on the case so expect to hear her name crop up during this coming investigation.
“SBF’s biggest challenge is going to be that his former colleagues are going to testify against him,” said Howard Fischer, a partner with Moses Singer and a former senior trial lawyer at the Securities and Exchange Commission.
Jury selection begins today and the trial is expected to last for six weeks. Bankman-Fried has been remanded in custody since Judge Lewis Kaplan revoked his bail on 11 August for witness intimidation.
What will happen if he is convicted?
Should he be convicted and given the maximum sentence, Sam Bankman-Fried could potentially serve up to 110 years in prison if he is convicted on all seven criminal counts.