FTX's Founder, Sam Bankman-Fried, was found guilty of seven charges and will be sentenced in March.
The industry is now shifting into greater maturity.
Sam Bankman-Fried, FTX founder and former CEO
In an outcome that comes as no surprise to observers, Sam Bankman-Fried, the Founder and former CEO of the now-defunct crypto exchange FTX, has been found guilty on all seven charges that he faced during his trial. As a result, he now potentially faces a maximum prison sentence of 110 years.
Those charges include wire fraud, conspiracy to commit fraud, and conspiracy to commit money laundering. Bankman-Fried will be sentenced on March 28 next year, although he faces a second trial on March 11 for five additional charges.
With the trial concluded, there is a prevailing sense that a chapter has closed, and it prompts reflection on how this impacts the entire cryptocurrency industry. To fully grasp the significance of the past few tumultuous years, it’s essential to delve into the context and surrounding events that led to Bankman-Fried’s downfall.
Bankman-Fried launched FTX in 2019, and the exchange peaked in mid-2021. By then, it had become the third-largest crypto exchange in the world. It had over a million users, while its upper executives were, as is now widely documented, living in otherworldly opulence, and eccentricity, in the Bahamas.
Part of the reason this rapid growth was possible was that as FTX launched, crypto itself was heading towards a manically bullish period, having recovered from the crash of 2018, which happened after the hugely euphoric run-up in prices at the end of 2017.
As unprecedented pandemic measures went into force in 2020, entire populations worldwide found themselves at home, always online, and often with stimulus payments incoming from the government. This occurred in sync with 2020’s Bitcoin halving (a four-year event widely believed to move the BTC price upwards) and suddenly there was a perfect recipe for a surging crypto bull market, with FTX and other platforms reaping substantial returns.
Worldwide Google searches for "bitcoin" surged in 2021.
What’s more, there was a public desire for a respectable exchange that retail investors, often inexperienced with crypto, could place their trust in. Bankman-fried stepped up to ensure that FTX played that role, putting in place celebrity endorsements, acquiring naming rights at what would briefly become the FTX Arena, and running a Super Bowl halftime commercial.
And, as for Bankman-Fried himself, he projected the role of disarmingly casual tech altruist: safely nerdish but visionary, or depicted as a genius who simply wanted to make society better, and make FTX’s users wealthier in the process. His hair was messy, he wore shorts, he claimed to drive a Toyota Corolla despite his riches, and he even advocated a supposedly world-changing brand of practical philosophy called Effective Altruism.
In addition, he generously contributed a significant portion of the funds he had available through FTX to politicians from both sides of the American political spectrum, thereby gaining influence and once more enhancing his political credibility.
SBF, Sam Bankman-Fried has been found guilty.
However around 40% of CONGRESS(!!!) received donations from SBF and FTX that were mixed user funds!
Only a few politicians returned or donated the funds.
The end of the SBF trial looks as though it may also mark the end of an era in crypto, indicating that the industry can never return to its wildest pioneer phase, or the attendant eccentricities and risks. That the jury verdict coincides with functioning regulatory frameworks being worked out worldwide, and even beginning to be put in place, only emphasizes the shift taking place.
Moreover, Bankman-Fried’s sentencing date, next March, looks like it might roughly coincide with the arrival of spot BTC ETFs, should they be approved. While we shouldn’t look for symbolism too much, one can’t help but detect that these changes in the landscape are happening all around the same time.
JUST IN: 🇺🇸 US Attorney says Sam Bankman-Fried perpetrated one of the biggest financial crimes in US history. pic.twitter.com/CLzVhiALUg
Crypto has been dominated in public, throughout its short history, by a series of flamboyant characters who sometimes push eccentricity to the extremes, or in Bankman-Fried’s case, into the realms of serious criminality. While we shouldn’t expect such participants to disappear entirely, on a stage to which sober corporate entities such as BlackRock are now entering, there will likely be fewer opportunities for another Bankman-Fried-like character to wrest temporary control of the story.
If the institutions are coming, then the game will change, and if you were on the front lines of crypto between 2019 and 2023, you got a close-up view of a clattering, one-of-a-kind spectacle that was truly of its moment.
The verdict may come to mark a change in crypto, as the industry shifts into greater maturity.
In an outcome that comes as no surprise to observers, Sam Bankman-Fried, the Founder and former CEO of the now-defunct crypto exchange FTX, has been found guilty on all seven charges that he faced during his trial. As a result, he now potentially faces a maximum prison sentence of 110 years.
Those charges include wire fraud, conspiracy to commit fraud, and conspiracy to commit money laundering. Bankman-Fried will be sentenced on March 28 next year, although he faces a second trial on March 11 for five additional charges.
With the trial concluded, there is a prevailing sense that a chapter has closed, and it prompts reflection on how this impacts the entire cryptocurrency industry. To fully grasp the significance of the past few tumultuous years, it’s essential to delve into the context and surrounding events that led to Bankman-Fried’s downfall.
Bankman-Fried launched FTX in 2019, and the exchange peaked in mid-2021. By then, it had become the third-largest crypto exchange in the world. It had over a million users, while its upper executives were, as is now widely documented, living in otherworldly opulence, and eccentricity, in the Bahamas.
Part of the reason this rapid growth was possible was that as FTX launched, crypto itself was heading towards a manically bullish period, having recovered from the crash of 2018, which happened after the hugely euphoric run-up in prices at the end of 2017.
As unprecedented pandemic measures went into force in 2020, entire populations worldwide found themselves at home, always online, and often with stimulus payments incoming from the government. This occurred in sync with 2020’s Bitcoin halving (a four-year event widely believed to move the BTC price upwards) and suddenly there was a perfect recipe for a surging crypto bull market, with FTX and other platforms reaping substantial returns.
Worldwide Google searches for "bitcoin" surged in 2021.
What’s more, there was a public desire for a respectable exchange that retail investors, often inexperienced with crypto, could place their trust in. Bankman-fried stepped up to ensure that FTX played that role, putting in place celebrity endorsements, acquiring naming rights at what would briefly become the FTX Arena, and running a Super Bowl halftime commercial.
And, as for Bankman-Fried himself, he projected the role of disarmingly casual tech altruist: safely nerdish but visionary, or depicted as a genius who simply wanted to make society better, and make FTX’s users wealthier in the process. His hair was messy, he wore shorts, he claimed to drive a Toyota Corolla despite his riches, and he even advocated a supposedly world-changing brand of practical philosophy called Effective Altruism.
In addition, he generously contributed a significant portion of the funds he had available through FTX to politicians from both sides of the American political spectrum, thereby gaining influence and once more enhancing his political credibility.
SBF, Sam Bankman-Fried has been found guilty.
However around 40% of CONGRESS(!!!) received donations from SBF and FTX that were mixed user funds!
Only a few politicians returned or donated the funds.
The end of the SBF trial looks as though it may also mark the end of an era in crypto, indicating that the industry can never return to its wildest pioneer phase, or the attendant eccentricities and risks. That the jury verdict coincides with functioning regulatory frameworks being worked out worldwide, and even beginning to be put in place, only emphasizes the shift taking place.
Moreover, Bankman-Fried’s sentencing date, next March, looks like it might roughly coincide with the arrival of spot BTC ETFs, should they be approved. While we shouldn’t look for symbolism too much, one can’t help but detect that these changes in the landscape are happening all around the same time.
JUST IN: 🇺🇸 US Attorney says Sam Bankman-Fried perpetrated one of the biggest financial crimes in US history. pic.twitter.com/CLzVhiALUg
Crypto has been dominated in public, throughout its short history, by a series of flamboyant characters who sometimes push eccentricity to the extremes, or in Bankman-Fried’s case, into the realms of serious criminality. While we shouldn’t expect such participants to disappear entirely, on a stage to which sober corporate entities such as BlackRock are now entering, there will likely be fewer opportunities for another Bankman-Fried-like character to wrest temporary control of the story.
If the institutions are coming, then the game will change, and if you were on the front lines of crypto between 2019 and 2023, you got a close-up view of a clattering, one-of-a-kind spectacle that was truly of its moment.
The verdict may come to mark a change in crypto, as the industry shifts into greater maturity.
Sam White is a writer and journalist from the UK who covers cryptocurrencies and web3, with a particular interest in NFTs and the crossover between art and finance. His work, on a wide variety of topics, has appeared on platforms including The Spectator, Vice and Hacker Noon.
CFTC Seeks Public Input on Proposed Retail Crypto Regulatory Framework
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