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The disgraced ‘crypto genius’ who established his 32 billion-dollar empire in the Bahamas and defrauded thousands of customers around the world, is going to prison after a conviction of seven charges of fraud.

Sam Bankman-Fried’s month-long case culminated in a guilty verdict around 7:40 pm on Thursday after four hours of deliberations in a Manhattan courtroom.

Prosecutor Damian Williams said Bankman-Fried “perpetrated one of the biggest financial frauds in American history.”

“The cryptocurrency industry might be new; the players like Bankman-Fried might be new. But this kind of fraud, this kind of corruption, is as old as time,” Williams said after the verdict was read.

Bankman-Fried, founder of the digital currency exchange FTX, was charged with seven counts of wire fraud, securities fraud and money laundering that swindled customers of FTX and channeled the money to his affiliated hedge fund, Alameda Research.

Bankman-Fried is expected to be sentenced on March 28, facing up to 110 years in prison.

Though Bankman-Fried issued a ‘not guilty’ plea and testified in his own defense, prosecutors had already reached a plea bargain with his conspirators who all pleaded ‘guilty’ for a lighter sentence. Former Alameda CEO Caroline Ellison, FTX co-founder Gary Wang and FTX head of engineering Nishad Singh who shared a five-bedroom luxury penthouse in Albany, New Providence with Bankman-Fried, all testified against him.

As Bankman-Fried stood in his own defense, clean-shaven in a pressed business suit, which is a far cry from his unkempt curls and casual dress sense–he answered “I can’t recall” over 140 times while under cross-examination. His defense attorney Mark Cohen attempted to sum up his dealings as a mistake, admitting “there were significant oversights.”

An appeal seems eminent since Cohen stated that though Bankman-Fried respects the jury’s decision he maintains his innocence and will continue to “vigorously fight the charges.”

Disgraced FTX Founder Sam Bankman-Fried who moved his multi-million dollar crypto empire to the Bahamas in 2021, is on a third night at Metropolitan Detention Center in Brooklyn after he violated his bail order.

The 31-year-old who adopted the Bahamas as his home, courting government officials before his empire imploded and was extradited to face fraud charges in the United States, tampered with witnesses ahead of his October trial according to Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York.

“My conclusion is there is probable cause to believe the defendant has attempted to tamper with witnesses on at least two… there is a rebuttable presumption that there is no set of conditions that will ensure Bankman-Fried will not be a danger.

“He has gone up to the line over and over again, and I am going to revoke bail,” Judge Kaplan said on Friday.

Since his extradition, Bankman-Fried was on bail and confined to his parent’s $4 million Palo Alto home.

What happened?

Prosecutors said, Bankman-Fried reached out to former FTX.US General Counsel Ryne Miller and used a virtual private network to watch the Super Bowl. Also, he shared part of his associate’s Alameda Research CEO Caroline Ellison’s private diary with the New York Times in an attempt to intimate her since she is a major witness for the prosecution in the case.

While on bail, prosecutors said he’s had conversations with author Michael Lewis, who is writing a book about FTX that is set for publication the week the trial begins.

After the judge’s order, Bankman-Fried was instructed to remove his navy suit jacket as two US marshalls prepared to handcuff him. His mother, Barbara Fried, attempted to approach him but was warned to stand back by a court officer and was expected to be taken to the Metropolitan Detention Center in Brooklyn.

The big story

After moving his exchange from Hong Kong to the Bahamas, Bankman-Fried flooded the Bahamas with money and donations. A little more than one year later, the millions of dollars disappeared from his exchange and it collapsed. He filed for bankruptcy.

Bankman-Fried’s trial is set for October as he faces charges of wire fraud, commodities fraud, securities fraud, money laundering and related conspiracy charges.

The industry titan courted by politicians and celebrities is now a criminal defendant facing years in prison.

Bankman-Fried’s lawyer said in court, he was protecting his reputation and intended to appeal.

Disgraced FTX founder Sam Bankman-Fried could face an additional 40 years in a US prison after prosecutors hit him with four more charges in documents unsealed on Thursday.

The additonal charges include conspiracy to commit bank fraud and conspiracy to operate an unlicensed money transfer business and demands for the forfeiture of assets which include assets held in Binance accounts, $170 million in cash held at Silvergate Bank and more than 55 million shares held in a commission free investing app Robinhood Markets.

Manhattan U.S. Attorney Damian Williams, said in new statements since the new indictments, “We are hard at work and will remain so until justice is done.”

The indictments also claim that Bankman-Fried, and his co-conspirators–Gary Wang and Caroline Ellison– “made over 300 political contributions, totaling tens of millions of dollars, that were unlawful because they were made in the name of a straw donor or paid for with corporate funds.”

“To avoid certain contributions being publicly reported in his name, Bankman-Fried conspired to and did have certain political contributions made in the names of two other FTX executives,” the new filing claims.

Other claims in documents stated that Bankman-Fried created a bogus company called North Dimension, “which had no employees or business operations,” to open a bank account for trading purposes after rejections from another bank. He also created a website for the fake company using monies from his credit card, prosecutors say.

Since being extradicted to the US from the Bahamas where FTX was headquartered, Bankman-Fried remains under house arrest at his parents’ home in California. He has pleaded not guilty to the eight previous charges against him.

Photo credit: Reuters

After former FTX Founder Sam Bankman-Fried signed extradition papers to face criminal charges in the United States, he will be handed over to US Marshalls.

The Bahamas judge Shaka Serville has approved all of the legal requirements for the extradition and was satisfied that Bankman-Fried was not “forced, coerced or threatened” into making the decision.

The 30-year-old  will be handcuffed and placed on board a plane with an escort from the FBI and the United States Marshals Service which have already arrived in the Bahamas. They will then carry him to La Guardia or JFK Airport.

He will either go to the federal detention facility or a Manhattan courtroom in the Southern District of New York. If he is sent to court, there will be an initial hearing and arraignment before a judge and he will enter a plea to the 8 charges against him.

Following a tumultuous week since his arrest in the Bahamas,  he is expected to arrive in the United States on Wednesday evening and will contest allegations that he funneled billions of dollars from his fallen exchange FTX, to his trading fund company, Alameda Research.

“Yes, I do wish to waive my right to such formal extradition proceedings,” he told the court on Wednesday morning.

His defense lawyer Jerone Roberts said his client was “anxious to leave” the Bahamas and requested that the “rule of specialty” be imposed which based on the Bahamas and US extradition treaty, states that a person can only be tried on the charges for which they are extradited.

Photo credit: Reuters