The jury in the trial of Sam Bankman-Fried, the former CEO of FTX, took less than five hours to decide that the former head of the crypto group was guilty of seven counts of fraud and conspiracy.
The trial of what was considered one of the “kings” of crypto assets took place over a month in Manhattan.
FTX’s downward spiral began when a report from trade publication CoinDesk raised questions about the financial health of Alameda Research, FTX’s research arm. Unlike what happens with banks, cryptocurrency trading platforms must hold client funds on a one-to-one basis—that is, for every dollar you deposit, you must have one dollar in case it gets withdrawn.
CoinDesk reported that a significant portion of Alameda Research’s balance sheet consists of FTT, the company’s proprietary cryptocurrency. Concerns about the ties between the two subsidiaries led to a wave of capital raising by FTX. According to the U.S. Department of Justice indictment, the platform did not have the liquidity to respond to customer requests because it used customer deposits to fund Alameda Research.
The US Department of Justice, the Securities and Exchange Commission (SEC) and the Commodities and Futures Trading Commission (CFTC) launched investigations, and a month after FTX filed for bankruptcy, Sam Bankman-Fried was detained in the Bahamas, where company headquarters. company and extradited to the United States.
The founder and former CEO are facing 13 criminal charges, seven of which have already been brought to trial in the first stage. The second will be scheduled for March 2024 and will also include civil proceedings.
Earlier this year, Sam Bankman-Fried pleaded not guilty to seven charges brought against him by prosecutors related to bribing Chinese authorities to unfreeze Alameda Research accounts, new fraud offenses and violating rules governing U.S. political donations, fraud or laundering. money.
Author: Business magazine
Source: CM Jornal
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