Sam Bankman-Fried Found Guilty: Crypto’s Fallout and New Industry Standards

Sam Bankman-Fried’s Guilty Verdict

On November 3, 2023, Sam Bankman-Fried, the former CEO of FTX, was found guilty on all seven charges against him, which included serious offenses like wire fraud and money laundering conspiracy. The jury’s verdict marks a significant moment in the saga of one of the most infamous figures in cryptocurrency, and he faces a potential prison sentence ranging from five to 20 years. Bankman-Fried’s attorneys are expected to argue against the prosecution’s recommendations before Judge Lewis Kaplan sentences him on March 28, 2024.

A Multibillion-Dollar Scheme

U.S. Attorney Damian Williams didn’t hold back in describing Bankman-Fried’s actions as a “multibillion-dollar scheme” aiming to elevate his status to that of the “king of crypto.” It appears that his reign has crumbled, leaving behind a trail of legal battles that could have all of Silicon Valley investing in legal insurance.

FTX’s Financial Roller Coaster

The aftermath of Bankman-Fried’s trial has seen FTX’s asset pricing climb to an impressive 57%, earning it the title of the highest among bankrupt crypto firms. The liquidations and financial gymnastics have put firms like Celsius (35-40%) and Genesis (50%) in the shade, raising eyebrows as to how a company that went bust could be as valuable as Swiss chocolate and fondue.

Key Asset Sales in Motion

FTX is now looking for permission from a Delaware bankruptcy court to sell off some of its prized assets including significant stakes in crypto asset manager Grayscale Investments. Valued at around $744 million, this could potentially soften the blow for creditors eager to reclaim their fortunes amidst the chaos.

New AI Safety Standards: A Dose of Regulation

Shifting gears from crypto to AI, President Biden’s recent executive order introduces new standards to reinforce AI safety and security within the U.S. market. The order aims to veer away from the Wild West chaos that many skeptics fear AI technology could usher in.

What Are the New Standards?

The standards demand increased transparency from developers of potent AI systems, requiring them to disclose safety test results. With the National Institute of Standards and Technology on board, there will be standardized tests to evaluate the safety and security of AI systems, ensuring that innovation doesn’t devolve into a full-blown sci-fi horror novel.

Clarity for Crypto Promotion in the UK

The Financial Conduct Authority (FCA) in the UK is addressing confusion surrounding the new rules for crypto promotions that took effect on October 8. Their new guidance aims to help companies comply without adding new obligations, which might just save some firms from floundering in regulatory waters.

Key Points of the FCA Guidance

• Reinforces expectations for crypto firms’ compliance.
• Responds to questions raised during the consultation phase.
• Aims for competitiveness on the international stage while ensuring domestic safety.

Switzerland’s CBDC Pilot

On the horizon is Switzerland’s foray into wholesale Central Bank Digital Currencies (CBDCs). The Swiss National Bank is launching a pilot program beginning December 2023, running until June 2024. Collaborating with commercial banks and exchanges, this initiative aims to demonstrate the utility of digital currencies in lowering transaction inefficiencies.