Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange, has stepped down as CEO and pleaded guilty to violating anti-money laundering laws. The deal with the United States Department of Justice (DoJ) is part of a larger settlement that involves several federal agencies and will include fees of more than $4bn, the DoJ said on Tuesday. The announcement is the latest blow to the cryptocurrency industry, which has been marred by a series of scandals and investigations that have unearthed fraudulent behaviour by central players and firms. Cryptocurrency has also comes under scrutiny as a tool used by illicit groups to circumvent global financial safeguards. Zhao, a Canadian national, pleaded guilty to one count of failure to maintain an effective anti-money laundering programme. “Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed. Now it is paying one of the largest corporate penalties in US history,” Attorney General Merrick Garland said.   This month, Sam Bankman-Fried, the 31-year-old founder of FTX, the world’s second-largest crypto exchange, was convicted of fraud for stealing more than $10bn from customers and investors. “In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases. The message here should be clear: Using new technology to break the law does not make you a disruptor. It makes you a criminal,” Garland said. Acting US Attorney Tessa Gorman for the western district of Washington said that […]

Sam Bankman-Fried’s fraud trial has ended with a guilty verdict for the crypto tycoon and the possibility that he spends decades behind bars. On Thursday, a New York federal court jury found Bankman-Fried guilty on all seven charges for fraud and conspiracy that were filed against him. The proceedings began on October 3, almost a year after his $32bn empire of FTX Trading and Alameda Research collapsed. Although Bankman-Fried admitted to making mistakes in how he ran FTX, he pleaded not guilty to the charges even as three former top executives testified against him. Here’s what to know about the verdict and its impact. Who is Sam Bankman Fried? Bankman-Fried co-founded FTX, a cryptocurrency exchange, in 2019 with former Google employee Gary Wang. He had also founded the company’s partner hedge fund, Alameda Research, in 2017. The now ex-CEO debuted on the Forbes billionaires list just two years after starting FTX. By the end of 2021, Forbes estimated his net worth at $26bn. On November 11, 2022, FTX filed for bankruptcy and Bankman-Fried resigned as CEO. Bankman-Fried is a Massachusetts Institute of Technology graduate in physics and held a Wall Street job before quitting to start FTX. The 31-year-old’s parents are Stanford law professors. When will Bankman Fried be sentenced? Bankman-Fried is scheduled for a sentencing hearing on March 28, 2024. Although the penalties of his charges may add up 110 years, the exact duration will be determined at the hearing, according to the Associated Press news agency. He is […]

Former crypto tycoon Sam Bankman-Fried has been found guilty on all charges after orchestrating what authorities have described as one of the biggest financial frauds in US history. A jury convicted Bankman-Fried, the founder of cryptocurrency exchange FTX, on seven counts of fraud, embezzlement and criminal conspiracy after over four hours of deliberations. Prosecutors accused Bankman-Fried, once the poster boy for virtual currencies, of stealing about $10bn, using customers’ funds to make risky investments, buy property and fund political campaigns. The crypto entrepreneur, 31, now faces up to 110 years behind bars. The verdict, following a month-long trial, comes almost a year after FTX filed for bankruptcy in a spectacular collapse that stunned financial markets and wiped out his estimated $26bn personal fortune. During his trial, Bankman-Fried admitted to making mistakes in his running of FTX, which enjoyed endorsements from celebrities including Tom Brady and Larry David, but denied ever setting out to steal from customers. In a risky move, Bankman-Fried testified in his own defence after three of his former fellow top executives pleaded guilty to fraud and testified against him. Prosecutors argued that the Massachusetts Institute of Technology graduate had been consumed by greed and had the “arrogance to think that he could get away with a fraud”. “He didn’t bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits – billions and billions of dollars […]

A US judge has revoked Sam Bankman-Fried’s bail after finding probable cause that the indicted founder of the bankrupt FTX cryptocurrency exchange tampered with witnesses at least twice. United States District Judge Lewis Kaplan announced the decision on Friday at a hearing over Bankman-Fried’s bail conditions in federal court in Manhattan, less than two months before the scheduled October fraud trial. He rejected a defence request to delay Bankman-Fried’s detention pending appeal of the bail revocation. The decision could complicate Bankman-Fried’s efforts to prepare for trial. The 31-year-old former billionaire faces charges of having stolen billions of dollars in FTX customer funds to plug losses at his Alameda Research hedge fund. Bankman-Fried, who has pleaded not guilty, had been largely confined to his parents’ Palo Alto, California, home on $250m bond since his December arrest. He was led out of the courtroom by members of the US Marshals Service in handcuffs after removing his shoelaces, jacket and tie and emptying his pockets. His parents, both law professors at Stanford University, were present in the courtroom. His mother, Barbara Fried, nodded to him in tears as he left. His father, Joseph Bankman, placed his hand over his heart as he watched his son be led away. Prosecutors first made their request to jail the former billionaire in a July 26 hearing, saying he “crossed a line” by sharing former romantic partner Caroline Ellison’s personal writings with a New York Times reporter. Ellison was chief executive of Alameda Research. As part of Bankman-Fried’s […]

Sam Bankman-Fried will prepare for his fraud trial from a Brooklyn jail where inmates ranging from convicted sex trafficker Ghislaine Maxwell to Honduras’s former president have complained of subpar conditions. US District Judge Lewis Kaplan in Manhattan ruled on Friday that Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, must be jailed for tampering with witnesses while free on a $250m bond at his parents’ home in Palo Alto, California. Bankman-Fried, who has pleaded not guilty to fraud charges over FTX’s collapse, will now be housed before his October 2 trial in Brooklyn’s Metropolitan Detention Center (MDC), a far cry from the luxurious Bahamas resort where he lived until his December 2022 arrest and extradition to the United States. In recent years, MDC has been plagued by persistent staffing shortages, power outages and maggots in inmates’ food. Earlier this year, a guard pleaded guilty to accepting bribes to smuggle in drugs. Public defenders have called conditions “inhumane”. In the winter of 2019, an electrical fire cut off the jail’s lighting and heat for days as temperatures fell to near minus 18 Celsius (zero Fahrenheit). Lawyers for Maxwell, who was convicted of recruiting and grooming teenage girls for abuse by the late financier and sex offender Jeffrey Epstein, said raw sewage seeped into her MDC cell. Her attorneys compared the “reprehensible and utterly inappropriate” conditions there to Hannibal Lecter’s incarceration in the 1991 movie The Silence of the Lambs, “despite the absence of the cage and plastic face guard”. They also […]

Sam Bankman-Fried used stolen customer funds to make more than $100m in political campaign contributions ahead of the 2022 United States midterm elections, federal US prosecutors said on Monday in a new indictment filed against the FTX cryptocurrency exchange’s founder. The indictment charges the 31-year-old former billionaire with seven counts of conspiracy and fraud over the collapse of the exchange. He has previously pleaded not guilty to charges of stealing billions in FTX customer funds to plug losses at Alameda Research, his crypto-focused hedge fund. Mark Botnick, a spokesman for Bankman-Fried, declined to comment. Bankman-Fried rode a boom in cryptocurrency values to amass a net worth estimated at $26bn and became an influential donor to mostly Democratic candidates and causes. But the November 2022 collapse of FTX – after a flurry of customer withdrawals due to concerns about the commingling of FTX and Alameda funds – decimated both his wealth and reputation. In the superseding indictment filed on Monday, the US Attorney’s Office in Manhattan said Bankman-Fried directed other FTX executives to make donations to evade contribution limits as part of a push for crypto-friendly regulation. A superseding indictment amends and replaces the original document and lists the formal charges against the defendant. “He leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow,” the indictment read. Prosecutors initially charged him with violating US campaign finance laws but […]