FTX founder Sam Bankman-Fried has been found guilty of looting $8 billion from customers of his now-bankrupt cryptocurrency exchange.
A 12-member jury in Manhattan federal court convicted Bankman-Fried on all seven counts he faced after a monthlong trial. With this, U.S. District Judge Lewis Kaplan has set Bankman-Fried’s sentencing for March 28, 2024, and he could face decades in prison.
The verdict came about a year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated $26 billion personal fortune.
According to a report by Reuters, the jury reached the verdict after just over four hours of deliberations.
The conviction was a victory for the U.S. Justice Department and Damian Williams, the top federal prosecutor in Manhattan, who made rooting out corruption in financial markets one of his top priorities.
Old time fraud
Speaking to reporters outside the courthouse, Damian Williams said:
- “The crypto industry might be new, the players like Sam Bankman-Fried may be new, but this kind of fraud is as old as time and we have no patience for it.”
His defense lawyer Mark Cohen said in a statement that he was “disappointed” but respected the jury’s decision.
- “Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him,” he said.
The trial
Earlier in his trial, Bankman-Fried testified that he didn’t defraud FTX customers or take their funds, but that Alameda “borrowed” money from the exchange.
Prosecutors argued Bankman-Fried made false promises and was responsible for the loss of billions of dollars for thousands of investors on FTX. They also argued he had many opportunities to come clean, but instead doubled down.
The DOJ’s December 2022 indictment stated that Bankman-Fried knowingly defrauded FTX customers by misusing their deposits to invest in other companies and pay off lenders and expenses.
After mounds of evidence and a verdict, that statement has been deemed true by the court and jury.
Former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh also testified for the prosecution after entering guilty pleas, said he directed them to commit crimes, including helping Alameda loot FTX and lying to lenders and investors about the companies’ finances.
The defence argued the three, who have not yet been sentenced, falsely implicated Bankman-Fried in a bid to win leniency at sentencing. Prosecutors may ask Kaplan to take their cooperation into account in deciding their punishment.
