Current:Home > StocksThe Bankman-Fried verdict, explained -Wealth Navigators Hub
The Bankman-Fried verdict, explained
View
Date:2025-04-15 21:18:01
NEW YORK (AP) — Sam Bankman-Fried co-founded the FTX crypto exchange in 2019 and quickly built it into the world’s second most popular place to trade digital currency. It collapsed almost as quickly. By the fall of 2022, it was bankrupt.
Prosecutors soon charged Bankman-Fried with misappropriating billions of dollars in FTX customer deposits. They said he used the money to prop up his hedge fund, buy real estate, and attempt to influence cryptocurrency regulation by making campaign contributions to U.S. politicians and pay $150 million in bribes to Chinese government officials.
He was put on trial in the fall of 2023.
WHAT DID HE DO WRONG?
FTX had two lines of business: a brokerage where customers could deposit, buy, and sell cryptocurrency assets on the FTX platform, and an affiliated hedge fund known as Alameda Research, which took speculative positions in cryptocurrency investments. As Alameda piled up losses during a cryptocurrency market decline, prosecutors said Bankman-Fried directed funds to be moved from FTX’s customer accounts to Alameda to plug holes in the hedge fund’s balance sheet.
Prosecutors said Bankman-Fried, now 32, also created secret loopholes in the computer code for the FTX platform that allowed Alameda to incur a multibillion-dollar negative balance that the hedge fund couldn’t repay, lied to a bank about the purpose of certain accounts it opened, evaded banking regulations and bribed Chinese officials in an attempt to regain access to bank accounts that had been frozen in that country during an investigation.
WHAT DOES BANKMAN-FRIED SAY?
In interviews and court testimony, Bankman-Fried acknowledged making mistakes, but blamed some of the wrongdoing on other executives at his company, and said he never intended to defraud anyone. He has also said the alleged harm to FTX’s customers has been exaggerated.
THE VERDICT
Bankman-Fried was convicted in November 2023 of two counts of wire fraud conspiracy, two counts of wire fraud, one count of conspiracy to commit money laundering, conspiracy to commit commodities fraud and conspiracy to commit securities fraud.
He was sentenced to 25 years in prison four months later in late March 2024. The judge in the case also ordered him to forfeit over $11 billion.
veryGood! (8653)
Related
- Which apps offer encrypted messaging? How to switch and what to know after feds’ warning
- Stranded motorist shot dead by trooper he shot after trooper stopped to help him, authorities say
- This Is the Only Lip Product You Need in Your Bag This Summer
- Transcript: Former Vice President Mike Pence on Face the Nation, July 2, 2023
- Apple iOS 18.2: What to know about top features, including Genmoji, AI updates
- Jennie Ruby Jane Shares Insight Into Bond With The Idol Co-Star Lily-Rose Depp
- What does a hot dog eating contest do to your stomach? Experts detail the health effects of competitive eating.
- Helping endangered sea turtles, by air
- NHL in ASL returns, delivering American Sign Language analysis for Deaf community at Winter Classic
- War on NOAA? A Climate Denier’s Arrival Raises Fears the Agency’s Climate Mission Is Under Attack
Ranking
- Louvre will undergo expansion and restoration project, Macron says
- Vanderpump Rules Reunion: Tom Sandoval and Raquel Leviss' Affair Comes to a Shocking Conclusion
- Thousands of Low-Income Residents in Flooded Port Arthur Suffer Slow FEMA Aid
- When Autumn Leaves Begin to Fall: As the Climate Warms, Leaves on Some Trees are Dying Earlier
- Federal appeals court upholds $14.25 million fine against Exxon for pollution in Texas
- U.S. Suspends More Oil and Gas Leases Over What Could Be a Widespread Problem
- Dad falls 200 feet to his death from cliff while hiking with wife and 5 kids near Oregon's Multnomah Falls
- Ohio Gov. DeWine asks Biden for major disaster declaration for East Palestine after train derailment
Recommendation
NFL Week 15 picks straight up and against spread: Bills, Lions put No. 1 seed hopes on line
Judge Orders Dakota Access Pipeline Spill Response Plan, with Tribe’s Input
Targeted as a Coal Ash Dumping Ground, This Georgia Town Fought Back
Stormi Webster Is All Grown Up as Kylie Jenner Celebrates Daughter’s Pre-Kindergarten Graduation
Retirement planning: 3 crucial moves everyone should make before 2025
Indiana police officer Heather Glenn and man killed as confrontation at hospital leads to gunfire
Climate Activists Converge on Washington With a Gift and a Warning for Biden and World Leaders
Oil Investors Call for Human Rights Risk Report After Standing Rock