Crypto News

Sam Bankman-Fried: All you need to know about FTX founder convicted of defrauding cryptocurrency customers

Sam Bankman-Fried has been found guilty on all seven counts related to fraud and money laundering. He is the co-founder and former CEO of crypto exchange FTX, once the world’s second-largest crypto exchange, and trading firm Alameda Research.

A New York jury convicted him of fraud in a scheme that cheated customers and investors of at least $10 billion. Jurors rejected Bankman-Fried’s claim that he had never committed fraud or meant to cheat customers before FTX collapsed into bankruptcy.

“His crimes caught up to him. His crimes have been exposed,” Assistant U.S. Attorney Danielle Sassoon told the jury of the onetime billionaire just before they were read the law by Judge Lewis A.

All you need to know about Sam Bankman-Fried

1) Sam Bankman-Fried grew worried he was not taking enough risks after graduation. Hence, the son of two Stanford Law School professors resigned from his Wall Street position and launched a cryptocurrency hedge fund in 2017, which sparked a series of events that led to his criminal conviction on Thursday for participating in what federal prosecutors have dubbed one of the largest financial frauds in US history.

2) After two years of launching a hedge fund, Alameda Research, Bankman-Fried founded FTX, an exchange that lets users buy and sell digital assets such as bitcoin, Reuters reported.

3) The next two years saw a sharp increase in the value of cryptocurrencies, which helped Bankman-Fried reach a net worth of $26 billion before turning 30, according to Forbes magazine.

4) Before the US midterm elections in 2022, he turned his wealth into political power and became one of the largest contributors to Democratic candidates and causes.

5) Originally from the Bahamas, Bankman-Fried gained notoriety for his disheveled, curly hair and his rumpled shorts, which he wore even when hosting dignitaries such as Bill Clinton.

6) On October 4, a federal court in Manhattan opened his trial. In their testimony, three ex-members of his inner circle—who have pleaded guilty and consented to work with the prosecution—described episodes in which he lost his cool around coworkers and implied that his eccentric persona was primarily a front, as per Reuters reports.

7) Bankman-Fried has entered a not-guilty plea to seven charges pertaining to fraud and conspiracy. While he has admitted to poor risk management, he has denied money theft.

8) Bankman-Fried, who is currently 31 years old, stated in court that he made errors that hurt FTX workers and clients, like failing to establish a risk management team. However, he claimed that he had no intention of robbing anyone or taking money from them.

9) Prior to starting Alameda, Bankman-Fried had little experience in the cryptocurrency space. The company’s early profits were derived from taking advantage of discrepancies in digital token prices between the US and Asia.

10) U.S. District Judge Lewis Kaplan revoked Bankman-Bried’s bail in mid-August, putting him in jail for allegedly attempting to influence witnesses at least twice, including by disclosing Ellison’s confidential correspondence to a reporter for the New York Times.