Just over a year ago, Sam Bankman-Fried might have been counting his large stash of virtual coins. Soon, he may be counting bars in prison instead. On Thursday, a Manhattan jury unanimously convicted the FTX founder of seven counts related to crimes he committed at the helm of the now-bankrupt cryptocurrency exchange. With some $8 billion in customer funds stolen, his misdeeds go down as one of the biggest financial frauds on record.
Bankman-Fried’s swift conviction, following a four-week trial, should bring a collective sigh of relief from firms using blockchain technology to solve real-world problems. FTX’s collapse fueled mistrust of the entire cryptocurrency sector, prompting a decline in investments and halting progress in related legislation.
Crypto enthusiasts argue that technology permits the creation of decentralized financial networks. It may take some old-fashioned U.S. justice to restore trust in the idea of a trustless system.
Despite predictions of its demise, the crypto market is still alive and well. The price of bitcoin has more than doubled this year as large financial institutions like BlackRock seek to make it more respectable. FTX may also be set for its own rebirth, with three bidders reportedly negotiating to help it relaunch trading services.
Assistant U.S. Attorney Nicolas Roos said before the jury, “this is not about complicated crypto, it’s about deception.” Bankman-Fried’s fate may be sealed, but the industry can finally move forward. Follow @AnitaRamaswamy on Twitter for more stories like this.