On the Conviction of Sam Bankman-Fried
Last week, the trial of Sam Bankman-Fried ended with guilty convictions on 7 counts of fraud, conspiracy and money laundering. His net worth was once estimated at over $20 billion and his firm FTX was valued at about $32 billion.
Mark Cohen, Sam Bankman-Fried's lead defense attorney, said,
He was an “awkward high-school math nerd” unfairly depicted by the government as “some sort of monster” who made “bad business judgments.”
"Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him."
Damian Williams, U.S. Attorney’s Office - Southern District Court, said,
"Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history – a multibillion-dollar scheme designed to make him the King of Crypto – but while the cryptocurrency industry might be new and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time. This case has always been about lying, cheating, and stealing, and we have no patience for it.
"This case is also a warning to every fraudster who thinks they’re untouchable, that their crimes are too complex for us to catch, that they are too powerful to prosecute, or that they are clever enough to talk their way out of it if caught. Those folks should think again, and cut it out."
Danielle Sassoon, U.S. Assistant Attorney said,
"He didn't bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits - billions and billions of dollars - to give himself money, power, influence.
"He thought the rules did not apply to him. He thought that he could get away with it."
Notes: 1) Bankman-Fried’s sentencing hearing is scheduled for March 2024. 2) He faces bribery and illegal campaign contribution charges in a separate trial next year.
OUR TAKE
At its peak, the FTX/Bankman-Fried story attracted significant investor attention. As the story unwound, it became apparent that some investors, celebrities, politicians and others ignored proper due diligence processes.
Bankman-Fried’s conviction highlights that cryptocurrency use requires the same compliance and oversight as other asset classes.
As money and digital assets evolve, innovators and policy makers will continue to assess their impact on financial systems.