Sam Bankaman-Fried, the founder and CEO of the largest cryptocurrency exchange, has recently pleaded guilty to charges of fraud and money laundering.
This news has sent shockwaves through the cryptocurrency community, as Bankaman-Fried was highly regarded and his exchange was considered one of the most trustworthy in the industry.
The details surrounding the charges are still emerging, but it is clear that this is a significant blow to the reputation of the cryptocurrency industry as a whole.
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers.
Prosecutors said Bankman-Fried lied to investors and lenders and stole billions of dollars from the bitcoin exchange FTX, which helped cause it to go bankrupt.
The defendant is to face seven charges related to the illegal acquisition and laundering of funds.
Frauded many FTX customers
He Frauded many FTX customers to put money into Bankman-Fried’s crypto trading company Alameda Research in the early days of the exchange when traditional banks were unwilling to allow it to open an account.
He promised many times in public to keep those funds safe, but he used them to pay back Alameda lenders, buy property, make investments, and give money to politicians, reads BBC report.
Alameda owed FTX $8bn (£6.5bn) when the company went out of business last November.
“He took the money. He knew it was wrong. He did it anyway because he thought he was smarter and better and that he could figure his way out of it,” Assistant US Attorney Nicolas Roos said in his closing arguments.
Following the bankruptcy of FTX in the previous year, Bankman-Fried was taken into custody by the police. It has been alleged that he was responsible for carrying out the largest financial fraud in the history of the United States. In this case, it is claimed that he engaged in deceitful and fraudulent activities such as lying, cheating, and theft.
Caroline Ellison, his ex-girlfriend, and two other close friends and colleagues of his pleaded guilty and decided to testify against him because of reducing their sentences.
Despite being involved in fraudulent activity, he has been handed over a potential maximum sentence of 110 years, which is set to be announced on March 28th of the next year.
Protect yourself from vulnerabilities using Patch Manager Plus to patch over 850 third-party applications quickly. Try a free trial to ensure 100% security.