Sam Bankman-Fried, 31, the once-celebrated founder of the renowned cryptocurrency exchange FTX, has been found guilty of fraud and money laundering at the conclusion of a high-profile trial in New York. The swift verdict delivered by the jury marks a staggering downfall for the former billionaire and a significant chapter in the history of the crypto industry.

Bankman-Fried’s case was marred by allegations of deceiving investors and misappropriating billions of dollars from FTX, leading to its eventual collapse. Despite maintaining his innocence and expressing disappointment with the verdict, the mounting evidence, including testimony from former associates, portrayed a complex web of financial mismanagement and deceit.

The trial, closely observed for its potential impact on the broader cryptocurrency sector, has brought to the fore the challenges and scrutiny faced by the industry. Bankman-Fried’s has now been overshadowed by the severe legal repercussions and the subsequent implications for the sector’s credibility and regulatory scrutiny.

Bankman-Fried has been under investigation by the Department of Justice over the sudden collapse of FTX, a $32 billion company that filed for bankruptcy on November 11 this year.

Also Read | Tom Brady, Gisele Bundchen, Larry David sued by investors after FTX collapse

Who is Sam Bankman-Fried?

Sam Bankman-Fried, known as SBF, was born on March 6, 1992. He was one of the richest people in crypto, climbing the ladder of the Bloomberg Billionaires Index at a young age before his empire came crashing down in November 2022.

He is a finance and cryptocurrency entrepreneur and the founder and former chief executive officer (CEO) of the bankrupt crypto exchange FTX, along with crypto trading firm Alameda Research. SBF rose to fame as head of one of the world’s largest cryptocurrency exchanges, with a personal net worth once exceeding $26 billion.

Also Read | PepsiCo plans to lay off hundreds of employees: Report

After users started withdrawing their investments from FTX at a rapid pace, Bankman-Fried filed for bankruptcy on November 11 this year for FTX, FTX’s US operations, and Alameda Research. The seismic activity exposed FTX and its affiliates for poor management and alleged misuse of customer funds.

Bankman-Fried was born on March 6, 1992, in Stanford, California. His mother Barbara Fried and father Joseph Bankman, both are professors at Stanford Law School. His brother, Gabriel Bankman-Fried, is a former Wall Street trader.

Also Read | Twitter has disbanded its Trust and Safety Council: Report

Fried attended high school at Crystal Springs Uplands School in Hillsborough, California. He studied physics at the Massachusetts Institute of Technology (MIT) and traded currencies, futures, and exchange-traded funds before switching to crypto trading.

He started his professional career as a trader at Jane Street Capital, where he specialized in arbitrage trading strategies focused on exchange-traded funds (ETFs).

Also Read | BlockFi maps bankruptcy filing, layoffs after FTX crash: Report

In late 2017, Fried left Jane Street and founded Alameda Research, a quantitative trading company making million per day actively trading cryptocurrency between various international markets. He founded the crypto exchange FTX in April 2019 and launched it in May. The company offered trading on crypto tokens and derivatives. In early 2022, investors valued FTX and its US operations at $40 billion.

Also Read | Binance CEO Changpeng Zhao calls for clarity of regulations, after rival FTX files for bankruptcy

FTX managed to survive the liquidity crisis that plagued the crypto market earlier in 2022 after a wave of contagion rocked the market in the wake of the $60 billion collapse of stablecoin TerraUSD.

According to data released ahead of US midterm elections, he was the sixth-largest political donor, having contributed $39.8 million with the vast majority going to support Democrats.

Like many other crypto exchanges, FTX used its crypto token to help its various projects.

Also Read | US scientists create first-ever nuclear fusion that results in net energy gain: Report

CoinDesk, on November 2 in a report, questioned FTX’s solvency with its use of FTT for liquidity. The report revealed that the single biggest asset on Alameda’s $14.6 billion balance sheet was “unlocked FTT,” while the third biggest asset on the records was a $2.16 billion pile of “FTT collateral.”

The news of Bankman-Fried’s empire’s exposure to FTT prompted the sell-off in the markets. FTT had a market cap of $3.4 billion on November 1 before CoinDesk’s report. The token has collapsed since then, as more details around SBF’s mismanagement are revealed.

Also Read | Why Elon Musk was booed by crowd at Dave Chapelle show

FTT’s total market cap is around $486 million as of December 12, according to the Coinmarketcap. On November 11, Bankman-Fried stepped down from his position as CEO of FTX shortly before the company filed for Chapter 11 bankruptcy.