After more than two weeks of testimony, Sam Bankman-Fried, the 31-year-old former cryptocurrency billionaire and founder of FTX, has been found guilty on all seven counts of fraud, conspiracy, and money laundering.
The charges, which include wire fraud conspiracy, wire fraud, conspiracy to commit money laundering, commodities fraud, and securities fraud, could potentially lead to a maximum of 20 years in prison for some counts and 5 years for others.
Following the verdict, Damian Williams, the U.S. attorney for the Southern District of New York, emphasized the seriousness of Bankman-Fried’s actions, stating that he had orchestrated a multibillion-dollar scheme, tarnishing the integrity of the cryptocurrency industry.
Bankman-Fried had steadfastly maintained his innocence since his arrest last year, following the collapse of FTX amid an $8 billion fund shortfall and allegations of misusing customer funds to support his hedge fund, Alameda Research.
In response to the verdict, Bankman-Fried’s attorney, Mark S. Cohen, expressed disappointment and reasserted his client’s innocence, stating that they would continue to vigorously fight the charges.
Bankman-Fried was accused of using customer funds for personal endeavors such as real estate purchases, political contributions, and charitable projects unrelated to FTX’s business of facilitating digital currency transactions.
The fallout from FTX’s bankruptcy in November 2022 cast a shadow over the entire crypto industry, resulting in the loss of billions in client wealth as other major players collapsed. As the verdict was delivered, Bankman-Fried stood frozen in the courtroom, while his parents watched on, visibly affected.
Natalie Tien, a former FTX employee, described the trial as cathartic, following months of confusion and depression after losing money when FTX collapsed. She echoed the sentiment that Bankman-Fried had seemingly believed he was above the law. U.S. Attorney Merrick Garland reiterated the importance of the case, stating that it should serve as a warning to others who attempt to hide their crimes within complex financial structures.
Witnesses for the prosecution, including former employees of FTX and Alameda Research, testified to Bankman-Fried’s involvement in using customer funds for personal investments and covering losses at Alameda. The defense attempted to portray Bankman-Fried as a well-intentioned entrepreneur who had made management errors.
During his own testimony, Bankman-Fried’s repeated inability to recall key details and documents under cross-examination appeared to undermine his case. He maintained that Alameda’s spending came from corporate, not customer, funds, and that any mistakes were not intentional.
The judge, Lewis Kaplan, will determine Bankman-Fried’s sentence, with potential for a minimum of 110 years. Tien suggested that Bankman-Fried might assist in investigating other potential crypto-trading fraud rather than facing jail time. Another trial is scheduled for March 11, 2024, to address additional charges not included in the current proceedings, marking the conclusion of a tumultuous year for Bankman-Fried and FTX.
