Sam Bankman-Fried, the "Crypto King," is convicted of FTX fraud

 Sam Bankman-Fried, the "Crypto King," is convicted of FTX fraud

After a month-long trial in New York, Sam Bankman-Fried, the former CEO of one of the largest cryptocurrency exchanges in the world, was found guilty of fraud and money laundering.

The jury deliberated for less than five hours before returning its decision.

It puts an end to the 31-year-old former millionaire, who is well-known as one of the faces of the cryptocurrency sector, a startling fall from grace.

FTX, Bankman-Fried's company, filed for bankruptcy last year, leading to his arrest.

He may now spend decades behind bars. His sentence is scheduled on March 28 of the following year.

Following the decision, US attorney Damian Williams released a statement saying, "Sam Bankman-Fried conducted one of the biggest monetary frauds in American history - a multibillion-dollar operation designed to make him the king of crypto."

"This case has always been basically lying, cheating and stealing, therefore we have no patience for it," he said.

Bankman-Fried was charged by prosecutors with deceiving lenders and investors and embezzling billions of dollars from cryptocurrency exchange FTX, so contributing to the collapse of the exchange. He was accused on seven charges of money laundering and fraud.

He had entered a not guilty plea to every accusation, arguing that despite his shortcomings, he had behaved honorably.

Following the judgment, Mark Cohen, Bankman-Fried's attorney, stated: "We respect the jury's decision. However, we are rather dissatisfied with the outcome.

"Mr Bankman-Fried maintained his innocence and will continue to strongly fight the charges against him," he said.

When the BBC asked Bankman-Fried's representative whether he intended to appeal the judgment, he did not answer right away.

In an attempt to have their sentences reduced, three of his former close friends and coworkers—including his ex-girlfriend Caroline Ellison—pleaded guilty and consented to testify against him.

Their sentencing is scheduled at a later time.

According to former federal prosecutor Renato Mariotti, the "administration won this case by putting a lot of pressure on participants, getting deals with them shortly thereafter on and trying this case in a very expedited way."

"Instead of complication the case, turning it into some esoteric crypto case, they tried it as a garden variety fraud."

The prosecution produced proof that, in the early days of the exchange, when regular banks refused to let it to create an account, FTX clients sent deposits to Bankman-Fried's cryptocurrency trading company, Alameda Research.

Rather than protecting those monies, as Bankman-Fried had publicly promised to do on many occasions, he used the money to pay back Alameda lenders, purchase real estate, make investments, and make political contributions.

The maximum sentence for five of the crimes Bankman-Fried was found guilty of is twenty years in jail; the maximum sentence for the other two counts is five years.

That means that Bankman-Fried might get a sentence of decades to come, but it is doubtful that the court would really impose the maximum of 110 years.

By November of last year, Alameda owed FTX $8 billion (£6.5 billion).

"He accepted the cash. He was aware of its error. During his closing remarks, assistant US attorney Nicolas Roos said, "He did it anyhow, because he thought he was more intelligent and adept and that he might have figured his way out of it."

In an attempt to persuade jurors that the prosecution had not shown sufficient evidence to support his claim of criminal intent, Bankman-Fried took the bold decision to testify on his own behalf.

He was portrayed by his lawyer, Mr. Cohen, as a geeky mathematician who was overtaken by his company' explosive growth. "There was bad judgment," he said.

"That does not constitute a crime."

In his testimony, Bankman-Fried maintained that the money transfers between his companies were "permissible" and said that, until a few weeks before to the FTX collapse last year, he was mostly ignorant of the financial hole that his subordinates had revealed.

Many clients were unable to get their money back after the collapse.

Since then, attorneys handling the bankruptcy case have said that they have recovered the great bulk of the funds that were lost.

The implications of Bankman-trial Fried's for the cryptocurrency sector, which hasn't been able to bounce back from last year's market turbulence, were being keenly observed.

He has been seen as a symbol of the industry's woes, which top US authorities have called replete with illegality.

Prior to the demise of his businesses, he was well-known for his celebrity connections and for often appearing in Washington and the media to talk about the industry.

He gained the title of "the king of crypto" due to the explosive expansion of FTX and his deal-making during the market slump that affected other cryptocurrency companies last year.

Congress is not likely to approve new regulations pertaining to cryptocurrencies very soon, thus Mr. Mariotti predicted that legal disputes over the sector will still take place in US courts.

"I really think having appropriate crypto regulations in the United States could decrease the sort of crime that occurred in the present case," he said.

Regulating will, regrettably, not likely happen anytime soon. However, it does indicate that the battle will carry on in court and in civil proceedings brought by the US financial regulators Securities and Exchange Commission and Commodity Futures Trading Commission, he said.