In crypto circles, the trial of Bankman-Fried was thought-about a “galactic embarrassment,” a sideshow whose final result would have little impact on the prospects or trajectory of remaining crypto companies, however solid a darkish cloud over the {industry} and attracted a torrent of unflattering press.
Its conclusion marks a chance for the crypto sector to begin anew. Bankman-Fried and FTX would be the story of the day, says Kurt Wuckert Jr., bitcoin knowledgeable at media firm CoinGeek, however they’ll quickly change into artifacts of crypto historical past, just like the closure of underground marketplace Silk Road or bankruptcy of the Mt. Gox exchange. FTX will change into simply one other “level of reference,” he says.
However that doesn’t preclude one other comparable fraud happening in future, says Wuckert Jr., notably whereas there stays a lack of regulatory clarity with respect to crypto in jurisdictions just like the US. Bankman-Fried’s conviction doesn’t sign that “crypto is clear,” says Kyla Curley, a forensic investigator specializing in crypto and accomplice at compliance advisory agency StoneTurn. Till crypto companies are held to a transparent and industry-specific set of requirements, she says, “purchaser beware” stays the message.
Probably the most instantly tangible advantage of the conviction could also be in its cathartic impact for FTX prospects, though it’s going to don’t have any bearing on the amount of cash returned on the finish of the chapter course of. “It’s extra about justice—about feeling and emotion,” says Mike van Rossum, founding father of buying and selling agency Folkvang, an FTX creditor and fairness holder. “We want a world the place there may be duty for the dangerous stuff you do. In Sam’s case, dangerous issues have been performed.”
Now the jury has returned its verdict, decide Lewis Kaplan will determine on an acceptable sentence for Bankman-Fried. The utmost jail sentence for the seven counts on which he has been convicted is larger than 100 years. However in observe, says Estes, the sentence is more likely to fall far wanting that mark. Kaplan is anticipated to decide on that inside the subsequent few months.
Within the meantime, Bankman-Fried should put together for a second trial. In March 2024, he will likely be tried on an extra 5 costs, introduced by the DoJ within the months after his preliminary arrest, together with conspiracy to commit financial institution fraud, conspiracy to commit acts of bribery, and securities fraud.
The issue for Bankman-Fried, says Estes, was at all times that he needed to defeat each of the 12 costs towards him to stroll free. That was made tougher when his trial was break up in two, leaving him with two units of jurors to win over. Though the burden of proof sits with the US authorities, Bankman-Fried was dealing with an “uphill battle,” says Estes, as a result of he solely wanted to be convicted of “one rely in both of the trials” for the decide to have the ability to “sentence him to jail.”
