In crypto circles, the Bankman-Fried trial was thought-about a “galactic shame,” a sideshow whose final result would have little impact on the prospects or trajectory of the remaining crypto firms however would solid a darkish cloud over the sector and unleash a flood of unflattering press.
Its conclusion marks a chance for the crypto sector to start out over. Bankman-Fried and FTX could be the story of the day, says Kurt Wuckert Jr., bitcoin professional at media firm CoinGeek, however they are going to quickly grow to be artifacts of crypto historical past, just like the closure of the Silk Highway underground market or the chapter of the Mt. Gox alternate. FTX will merely grow to be a brand new “level of reference,” he says.
However that does not rule out the potential of an identical fraud occurring sooner or later, says Wuckert Jr., particularly as jurisdictions just like the US nonetheless face unclear laws surrounding crypto. Bankman-Fried’s conviction doesn’t imply that “crypto is clear,” mentioned Kyla Curley, a forensic investigator specializing in crypto and associate at compliance consultancy StoneTurn. Till crypto firms adhere to a transparent and industry-specific set of requirements, she says, the “purchaser beware” message will stay.
Maybe probably the most instantly tangible good thing about the judgment lies in its cathartic impact for FTX shoppers, although it won’t have an effect on the amount of cash returned on the finish of the chapter course of. “It is extra about justice – about feeling and emotion,” mentioned Mike van Rossum, founding father of buying and selling agency Folkvang, an FTX creditor and shareholder. “We want a world the place there may be accountability for the unhealthy belongings you do. In Sam’s case, unhealthy issues have been achieved.”
Now that the jury has reached its verdict, Decide Lewis Kaplan will determine on an applicable sentence for Bankman-Fried. The utmost jail sentence for the seven offenses for which he was convicted is multiple hundred years. However in follow, Estes says, the sentence will doubtless fall nicely in need of that aim. Kaplan is predicted to decide on this inside a number of months.
Within the meantime, Bankman-Fried should put together for a second trial. In March 2024, he shall be tried on 5 extra fees filed by the DoJ within the months after his preliminary arrest, together with conspiracy to commit financial institution fraud, conspiracy to commit bribery and securities fraud.
The issue for Bankman-Fried, Estes says, was all the time that he needed to beat all 12 fees in opposition to him to get out. That was made much more troublesome when his trial was cut up in two, forcing him to win over two units of judges. Though the burden of proof is on the U.S. authorities, Bankman-Fried confronted an “uphill battle,” Estes says, as a result of he solely needed to be convicted of “one rely in one of many trials” earlier than the choose was in a position to “convict him to jail.”