Tech bro and Democratic Party mega donor Sam Bankman-Fried has been found guilty on seven criminal fraud counts stemming from his crypto company FTX and it's fiscal relationship with Alameda Research.
The month-long jury trial concluded in the guilty verdict, and that jury will now decide his fate. He could face up to 115 years in prison, CNBC reports. Bankman-Fried, 31, pleaded not guilty on all counts of wire fraud, securities fraud, and money laundering.
The jury did not take long on their deliberations. “The central question for jurors to consider was whether Bankman-Fried acted with criminal intent in taking customer funds from FTX and using that money to pay for real estate, venture investments, corporate sponsorships, political donations and to cover losses at Alameda,” CNBC reports.
In 2022, Bankman-Fried's crypto empire came crashing to a halt. He had been living with his girlfriend Caroline Ellison in what was termed a “polycule” in the Bahamas. He ran FTX, a crypto exchange, while she headed up Alameda. Much of Alameda's holdings were in FTX's proprietary coin, and the value of FTX was bolstered by Alameda holding so much of that coin. When Alameda was short on cash, it would be propped up by FTX. The two companies together appeared to be worth far more than they actually were due to this intimate relationship.
When head of crypto exchange Binance Changpeng Zhao began to have suspicions in fall 2022 that the value of FTX was not actually as high as had been reported, he made it known that he would sell his holdings in the company. That created a rush on FTX, and as investors tried to withdraw their crypto, it became apparent that the company simply did not have it.
In fact, they were short some $10 billion. Bankman-Fried had been moving funds from FTX to prop up Alameda.
Zhao and Bankman-Fried appeared to come to a deal in which Binance would buy FTX, but when Zhao took a look at the financials, he said that he would not go through with it.
This was the beginning of the end for FTX and Bankman-Fried. Malfeasance was slowly but surely revealed over the coming months, and eventually he was charged.
The saga of FTX and its sudden demise captured attention due to the relationship of its founder, Bankman-Fried, with Democrat politicians and causes. He was a major donor to Dems during the 2021-22 election season, and was the second highest donor behind George Soros, giving nearly $40 million to Democrat politicians. He also gave to some select Republican candidates. He was the largest donoro to the Protect Our Future PAC, which gave substantial sums to Joe Biden inn 2020.
This is a breaking story and will be updated.