FTX’s Sam Bankman-Fried found guilty. A timeline of the events leading up to here
US Attorney Damian Williams said the FTX fraud perpetrated by Bankman-Fried is one of the biggest financial frauds in American history.
Sam Bankman-Fried, co-founder and former CEO of cryptocurrency exchange FTX, is convicted on seven charges of fraud and money laundering by a New York jury, as per an AP report. The jury rejected the troubled entrepreneur's claims of innocence and found him guilty on all charges in a scheme that wiped out at least $10 billion in investor funds, it added.
FTX, which was once the second-largest crypto exchange in the world, folded into bankruptcy in 2022. Bankman-Fried's other firm Alameda Research was also under scrutiny and has shut shop.
Speaking to reporters after the hearing, US Attorney Damian Williams said the FTX fraud perpetrated by Bankman-Fried is "one of the biggest financial frauds in American history".
"(It was) a multibillion-dollar scheme designed to make him the king of crypto. But here’s the thing: The cryptocurrency industry might be new. The players like Sam Bankman-Fried might be new. This kind of fraud, this kind of corruption is as old as time and we have no patience for it," Williams added.
Also Read: Rise and fall of crypto exchange FTX
A timeline of the events leading up to Bankman-Fried's conviction and the collapse of FTX
November 2022: The dominoes begin falling
Crypto exchange Binance sold all of its FTT tokens on November 6, and promptly the next day FTX declared a liquidity crisis. The exchange entreated fellow venture capitalists (VCs), including Binance for a bailout. On November 9 after previously agreeing to take on FTX's non-US business, Binance walked back on the deal citing discrepancies found during due diligence.
November 2022: Regulatory action begins
Assets of FTX's subsidiary in the Bahamas were frozen on November 10, following which Bankman-Fried admitted to a cash crunch in the non-US business. Alameda Research is closed and a new CEO is appointed for FTX. On November 11, the crypto exchange filed for Chapter 11 bankruptcy. On November 12 FTX reports that a hacker stole $477 million of its assets and shifted its digital assets to cold storage. The Bahamas seized FTX assets in the region on November 18.
Also Read | Answered: Six questions about the fall of FTX
December 2022: Arrest and extradition
Authorities in the Bahamas arrest Bankman-Fired and later extradite him to the United States for trial. He is released from prison on December 22, for a historic $250 million bond - the largest set by a Federal US Judge.
January 2023: Court proceedings begin
During the hearing, Bankman-Fried pleaded not guilty and the judge scheduled the next hearing for October 2023. The beleaguered founder in a blog blames the crypto market downturn for FTX's ill fortune and denies fraud.
February 2023: Circle collapsing
All three former inner circle colleagues of Bankman-Fried plead guilty to fraud charges and agree to cooperate with investigations leaving the co-founder cornered.
Also Read | Crypto Crisis: A timeline of key events
August 2023: Bail revoked
The US district judge revoked Bankman-Fried's bail on August 11 due to probable cause that he tampered with witnesses at least twice. He was remanded to Brooklyn's Metropolitan Detention Center pending trial.
October 2023: Trials and defense
Bankman-Fried's trial began at a Federal Court in Manhattan on October 3. During a hearing on October 28, the co-founder admitted that many people were hurt by FTX's collapse, but continued denying fraud from his end.
November 2023: Guilty
A New York jury found Bankman-Fried guilty on all seven charges of fraud and money laundering and rejected his claims of innocence.
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First Published:3 Nov 2023, 10:00 AM IST
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