NEW YORK: Cryptocurrency supporters rejoiced on Nov 3 following the conviction of Sam Bankman-Fried, once considered a prominent figure in the industry. They hope that this verdict will help the troubled sector move forward from a scandal that cost billions.
Yat Siu, the president of Animoca Brands, a video game publisher and investor in blockchain projects, stated that the “verdict should hopefully mark the end of a dark era in our industry”.
On Nov 2, a New York jury found Bankman-Fried, also known as “SBF”, guilty of all seven charges against him, including fraud, conspiracy, and money laundering.
He was found guilty of using customer funds deposited on his FTX cryptocurrency exchange platform to support risky investments and trades through his personal investment firm, Alameda Research.
Bankman-Fried could face a sentence of over 100 years in prison, with the sentencing scheduled for March 28, 2024. He is expected to appeal the verdict.
Alfred Lin, a partner at Sequoia, one of Silicon Valley’s renowned venture capital firms, expressed that the “swift and unanimous verdict confirms what we already knew: that SBF misled and deceived so many, from customers and employees to business partners and investors, including myself and Sequoia”.
Jeff Ross, the founder of Vailshire Capital Management, which invests in cryptocurrencies, wrote on X that Thursday’s decision “means another dead weight has been pried off of bitcoin. This is good… Onward”.
The collapse of FTX last year marked the dramatic conclusion of events that began in the spring of 2022 when various cryptocurrency-related companies started to fail.
This period witnessed a two-thirds drop in the value of bitcoin, the industry’s leading currency, between March and November 2022.
Bitcoin took almost a year to recover and has only recently regained momentum.
Hayden Adams, the founder of Uniswap, a cryptocurrency exchange platform, cautioned that it’s “not a day to celebrate” as billions in user funds were lost and the industry suffered significant reputational damage. He added that the only beneficiaries were law firms and opponents of crypto.
Nick Tomaino of investment firm 1confirmation criticized venture capitalists who “are now taking victory laps because of a guilty verdict” after giving SBF hundreds of millions of dollars. He highlighted the lack of accountability for their poor judgment and the greed that led them into such a massive fraud.
Adams emphasized the need for improvement in the industry’s next cycle, urging a focus on technology, values, early detection of warning signs, and avoidance of charismatic individuals with sociopathic tendencies. – AFP
