Sam Bankman-Fried, the co-founder of the FTX crypto exchange, faced a dramatic downfall after the company went bankrupt in the fall of 2022. Prosecutors alleged that Bankman-Fried misappropriated billions of dollars in FTX customer deposits to support his hedge fund, engage in real estate transactions, influence cryptocurrency regulations through political contributions, and pay bribes to Chinese government officials.
The collapse of FTX was attributed to the transfer of funds from customer accounts to prop up the struggling hedge fund, Alameda Research, during a cryptocurrency market downturn. Bankman-Fried was accused of creating loopholes in the FTX platform's code to allow Alameda to accumulate a significant negative balance that it could not repay. Additionally, he was charged with deceiving a bank about account purposes, violating banking regulations, and attempting to unfreeze accounts in China through bribery.
During his trial in the fall of 2023, Bankman-Fried admitted to errors but shifted blame onto other company executives. He maintained that he did not intend to defraud anyone and downplayed the extent of harm caused to FTX customers.
In November 2023, Bankman-Fried was found guilty on multiple charges, including wire fraud conspiracy, wire fraud, money laundering conspiracy, commodities fraud conspiracy, and securities fraud conspiracy. Subsequently, in late March 2024, he was sentenced to 25 years in prison and ordered to forfeit over $11 billion by the presiding judge.
