The U.S. Department of Justice has decided not to pursue a second trial against Sam Bankman-Fried, the disgraced founder of FTX, one of the world's largest cryptocurrency exchanges.
Bankman-Fried, 31, was found guilty on Nov. 2 of seven counts of fraud, conspiracy and money laundering in what prosecutors called "one of the biggest financial frauds in American history." He faces up to 110 years in prison at his sentencing, scheduled for March 28, 2024.
DOJ Accused of Covering for The "Deep State"
A second trial, originally set for March 11, 2024, would have added six more charges, including bank fraud, bribery and operating an unlicensed money transfer business. Prosecutors said they dropped the case in the interest of the victims, who want a quicker resolution to the first trial's sentencing phase.
The decision drew criticism from some observers, who accused the DOJ of covering for the "deep state" by not holding Bankman-Fried accountable for his illegal political donations. Others said the move was a miscarriage of justice for the crypto community, which suffered massive losses and reputational damage from Bankman-Fried's scheme.
The Billionaire Philantropist
Bankman-Fried, a former Wall Street trader and MIT graduate, founded FTX in 2019 and quickly rose to fame as a crypto billionaire and philanthropist. He was ranked the 41st-richest American in the Forbes 400 in 2023, with a net worth of $16.2 billion.
However, his public persona masked significant problems at FTX, which he used as a personal piggy bank to fund his lavish lifestyle, political ambitions and other ventures. He also ran a hedge fund, Alameda Research, which he used to manipulate the crypto market and defraud his lenders.
FTX Insolvency and Bankruptcy
In November 2022, evidence of his fraud began to surface, triggering a run on FTX by depositors who tried to withdraw their assets. The exchange collapsed and filed for bankruptcy, leaving millions of customers and investors in the lurch. Bankman-Fried was arrested in the Bahamas and extradited to the U.S., where he pleaded not guilty to all charges.
His trial, which lasted for six weeks, featured testimonies from former employees, business partners, regulators and victims of his fraud. The jury deliberated for a little over four hours before reaching a unanimous verdict. Bankman-Fried showed no emotion as he was convicted of all counts.
He remains in custody pending his sentencing, where he faces a minimum of 20 years and a maximum of 110 years in prison. His lawyers said they will appeal the verdict and continue to fight the charges. They also said they are grateful that the government decided not to proceed with the second trial.
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