The justice system found Bankman-Fried guilty of seven crimes of fraud and one of conspiracy. The convicted person did not plead guilty to the alleged offenses and announced he would file an appeal.
The value of the losses suffered by people who trusted Bankman-Fried is even greater, because – in addition to the clients of the FTX cryptocurrency exchange – its capital investors and lenders of the Alameda Research investment fund were also harmed. In total, all these people lost approximately $11 billion. Prosecutors called Bankman-Fried's actions one of the largest financial frauds in U.S. history, Reuters noted.
As added, prosecutors demanded a prison sentence of 40 to 50 years for the 32-year-old. Ultimately, the court issued a lighter sentence.
Bankman-Fried was detained in December 2023 in the Bahamas, the day before he was scheduled to testify before the US Congress regarding the bankruptcy of FTX, one of the world's largest cryptocurrency exchanges.
The exchange, launched in 2019 and based in the Bahamas, filed for bankruptcy on November 11 last year as customers rushed to withdraw $6 billion from the platform in just 72 hours. Since then, it has emerged that Bankman-Fried was secretly using billions of dollars in client funds to support his business.
Following the stock market collapse, federal prosecutors in New York charged Bankman-Fried with a total of eight counts of fraud, embezzlement and violations of campaign finance laws. Separate allegations were also made by the stock exchange regulator SEC.
According to the New York prosecutor's office, Bankman-Fried used clients' money to cover the debts and expenses of his Alameda Research investment fund. The founder of FTX was also accused of conspiracy to violate election campaign financing regulations. He was to donate money to the election campaigns of politicians of both major American parties using the so-called poles, as well as from corporate accounts, which is prohibited.
Before the bankruptcy was announced, FTX was a giant on the cryptocurrency market, and Bankman-Fried's fortune was estimated at $16 billion. The company and its owner were active in the public forum, engaging outstanding sports and cultural figures in advertisements. The ads featured, among others: NBA stars Stephen Curry and Shaquille O'Neal and American football legend Tom Brady.
