Sam Bankman-Fried, once at the helm of one of the world’s largest cryptocurrency exchanges, has been found guilty of all seven criminal charges against him following a month-long trial in New York.
The FTX founder, aged 31 and the offspring of two Stanford legal scholars with a degree from the Massachusetts Institute of Technology, now faces a potential prison sentence of up to 115 years.
Bankman-Fried was convicted of wire fraud and conspiracy to commit wire fraud involving FTX customers and Alameda Research lenders, as well as conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors.
Additionally, he was found guilty of conspiracy to commit money laundering. All these charges were linked to the collapse of FTX and its sister hedge fund, Alameda, in late 2022.
Despite pleading not guilty to these allegations, Bankman-Fried’s trial featured key testimonies from government witnesses, including his ex-girlfriend and former head of Alameda, Caroline Ellison, and FTX co-founder Gary Wang, a childhood friend from math camp.
Both had previously pleaded guilty to multiple charges and cooperated as prosecution witnesses.
Mr Fried’s defence primarily relied on his testimony, where he asserted his innocence, claiming he had not engaged in fraudulent activities but had made business errors instead.
“The central issue for the jurors to deliberate upon was whether he had knowingly acted with criminal intent in appropriating customer funds from FTX for purposes such as real estate investments, venture capital, corporate sponsorships, political donations, and covering losses at Alameda following the sharp drop in cryptocurrency prices the previous year.”
Assistant U.S. Attorney Nicolas Roos argued in his closing statement that there was little dispute over the disappearance of $10 billion in customer funds from FTX’s crypto exchange.
The key question was whether Bankman-Fried was aware that taking the money was unethical.
“FTX, a cryptocurrency exchange that had previously been valued at $32 billion, faced bankruptcy in November the previous year, leading to the disappearance of $8 billion in customer funds. Following the verdict, US attorney Damian Williams stated that Sam Bankman-Fried had orchestrated a massive financial fraud, aiming to establish himself as the dominant figure in the world of cryptocurrency. Williams emphasized that the case revolved around deception, dishonesty, and misappropriation, with no tolerance for such behavior,” BBC reported.
His sentencing is pending and his case has drawn comparisons to that of Elizabeth Holmes, the founder of Theranos, a medical device company that ceased operations in 2018.
In early 2022, Holmes was convicted of defrauding investors in Theranos and received a sentence of over 11 years in prison, commencing her incarceration at a minimum-security facility in Bryan, Texas in May.