In the latest twist in a high-profile financial fraud case, Sam Bankman-Fried, the founder of FTX, has been found guilty in a month-long trial. The jury deliberated on all seven charges against him, resulting in a potential maximum sentence of 115 years in prison.
The 31-year-old accused, the son of two legal scholars from Stanford and a graduate of the Massachusetts Institute of Technology, was convicted on a range of charges, including wire fraud and conspiracy to commit wire fraud against FTX customers and Alameda Research creditors. Additionally, Bankman-Fried faces accusations of conspiracy to commit securities fraud, conspiracy to commit commodities fraud against FTX investors, and conspiracy to commit money laundering.
It is noteworthy that the defendant had pleaded not guilty to all charges, which were linked to the collapse of FTX and the sister hedge fund, Alameda, at the end of last year.
Following the verdict readings, Damian Williams, the U.S. Attorney for the Southern District of New York, stated, "Sam Bankman-Fried perpetrated one of the most significant financial frauds in American history. While the cryptocurrency industry may be relatively new and players like Sam Bankman-Fried emerging, this type of fraud and corruption is as old as time, and we have no tolerance for it."
The trial, which commenced in October, featured testimonies from both former close friends and top lieutenants of Bankman-Fried, who were called as witnesses. The jury swiftly reached a verdict after receiving the case on Thursday afternoon, breaking for dinner.
Tension in the courtroom escalated when the jury returned promptly and the verdict was announced. Bankman-Fried's parents appeared visibly anxious, seated in the second row and sharing embraces. The defendant, sporting a black suit and a purple tie, remained stoic and gazed straight ahead.
Judge Lewis Kaplan, presiding over the trial from the top floor of the Lower Manhattan courthouse, instructed Bankman-Fried to stand and face the jury box as the verdicts were read. The guilty verdict was read out, and the defendant displayed no emotional reaction.
Subsequent to the guilty verdicts, Bankman-Fried's attorney, Mark Cohen, asserted that his client "maintains his innocence and will continue to vigorously contest the charges."
The month-long trial was distinguished by testimonies from key government witnesses, including Caroline Ellison, Bankman-Fried's former girlfriend and the former head of Alameda, as well as FTX co-founder Gary Wang, who had been a childhood friend of Bankman-Fried from a math camp. Both had pleaded guilty to multiple charges in December and cooperated as prosecution witnesses.
Most of the defense's case relied on Bankman-Fried's own testimony, wherein he claimed not to have committed fraud or misappropriated customer funds but rather admitted to making some business errors.
The pivotal question for the jurors was to determine whether Bankman-Fried acted with criminal intent in appropriating customer funds from FTX and utilizing that money for real estate acquisitions, venture investments, corporate sponsorships, political contributions, and to offset losses at Alameda after the crypto market plunged last year.
Assistant U.S. Attorney Nicolas Roos stated in his closing argument on Wednesday that there was "no serious dispute" regarding the disappearance of $10 billion in customer funds from FTX's cryptocurrency exchange. The issue, he contended, was whether Bankman-Fried knew that taking the money was unethical.
Bankman-Fried now awaits sentencing. His case has drawn comparisons to that of Elizabeth Holmes, the founder of the medical device company Theranos, which ceased operations in 2018. Holmes, at the age of 39, was convicted in early 2022 on four counts of defrauding Theranos investors after testifying in her own defense. She was sentenced to more than 11 years in prison and began serving her sentence in May at a minimum-security facility in Bryan, Texas.