Eduardo Muñoz/Reuters
On August 11, 2023, Sam Bankman Freed, the founder of the bankrupt cryptocurrency exchange FTX, appears in a court in New York, United States, and asks the judge in charge of the fraud case to prevent him from going to jail prior to trial. He appears in court while others try to persuade him.
new york
CNN
—
It took Sam Bankman Freed less than a year to go from cryptocurrency prodigy to convicted felon.
No one is happier about this than the industry experts who briefly made him a rock star.
When Bankman Freed's crypto empire collapsed last November, the emerging industry was set back years. For crypto believers who are still standing up and working hard, the trial couldn't end soon.
Bobby Zagotta, U.S. CEO of European-based exchange Bitstamp, said: “Following the conclusion of the trial, the crypto community may begin to turn the page on this unfortunate chapter.” said. “SBF…does not define the crypto sector or what we are trying to achieve.”
Cryptocurrencies have struggled to emerge from the shadow of FTX over the past year, but with Bankman Fried facing a prison sentence, there's no shortage of Schadenfreude flying around.
“A lot of people in the crypto industry are happy,” said Iesha Yadav, a law professor and associate dean at Vanderbilt University. “I think they would be very happy to see SBF and FTX punished in the harshest terms possible.”
But even as major institutional investors like BlackRock and Fidelity are lining up to join Bitcoin funds, shaking up the relationship between cryptocurrencies and the bad guys is easier said than done.
“The entire crypto industry will celebrate this ruling and call for a 'back to business' attitude,” said Kurt Uckert Jr., chief bitcoin historian at CoinGeek. “But this ignores the larger systemic problems that exist in the industry.”
The exchange collapse sparked an epidemic in the crypto market, deepening the sustained decline and reducing the industry's value by $2 trillion in 2022. Several companies exposed to FTX were forced to file for bankruptcy or suspend withdrawals. Regulators have filed lawsuits accusing some of the industry's biggest companies, including Coinbase and Binance, of selling unregistered securities. His FTX customers whose deposits have evaporated are still at a loss as to whether they will receive their full refunds.
Bankman Freed's memory will not be easily erased. The fraud he was convicted of orchestrating was one of the largest in U.S. history, placing him in the pantheon of fraudsters along with Bernie Madoff and Elizabeth Holmes.
And the guilty verdict isn't the end of his legal battles.
A second trial on five additional charges, including campaign finance violations and bribery of foreign officials, is scheduled for March, with the Justice Department deciding whether to continue pursuing the case. Bankman Freed's lawyers vowed to continue fighting to prove his innocence and prepared for an appeal.
Beyond FTX and Bankman Freed, cryptocurrencies remain in a regulatory battle with the Securities and Exchange Commission and its leader Gary Gensler, who has taken an openly hostile stance toward digital assets. is trapped in.
Eric Souffer, a political consultant for a major cryptocurrency company, said of Bankman Fried's conviction, “There is certainly an element of “the witch is dead.'' “But in the case of cryptocurrencies…the bogeymen are still Gary Gensler and the SEC, and I don't think this case fundamentally changes that dynamic.”
