Sam Bankman-Fried, whose FTX empire was one of the world’s largest digital assets powerhouses, allowing him to become a major Washington, D.C., lobbying force, was found guilty Thursday on seven criminal counts of fraud and conspiracy, Politico reports. The verdict capped what prosecutors called one of the biggest financial frauds in U.S. history, setting up the 31-year-old fallen business mogul potentially to serve decades in prison. As the emerging industry looks to move on from Bankman-Fried, crypto giants like Binance, Coinbase, and Gemini are still heading for courtroom clashes with regulators that could prove an even greater threat to the market’s future. The Securities and Exchange Commission has brought more than two dozen crypto-related cases since FTX collapsed, with Chair Gary Gensler calling the business “a field rife with fraud, scams, bankruptcies and money laundering.” Financial regulators are taking aim at the more than $1 trillion crypto market, which they say is filled with tokens, companies, and projects that violate long-standing securities and derivatives trading rules.
Regulators have long voiced wariness about crypto, but FTX’s downfall dramatically changed the tone. Last year, Bankman-Fried pressed for the establishment of industry-friendly rules, becoming the face of crypto in the nation’s capital. He doled out millions of dollars in political donations, met with regulators across the government, and tried to sell lawmakers on the merits of digital assets. Then FTX crumbled, prompting lawmakers to walk away from legislation and regulators to step up enforcement campaigns and calls for tougher policing. “We’ve gotten more of an inside look into what was a black box of crypto” since FTX, Commodity Futures Trading Commission member Christy Goldsmith Romero said. “Understanding more about how some of these companies have operated means that a responsibility then shifts to policymakers [and] regulators about what to do.” Many crypto executives have cheered the authorities in their pursuit of alleged criminality in crypto, insisting it has little to do with the digital assets business and unfairly taints the market. However, the industry has taken up a more hostile tone toward financial regulators’ attacks, vowing to fight claims that crypto companies are skirting investor protection and market rules.