Fallen cryptocurrency “king” Sam Bankman-Fried faces a jail sentence of up to 115 years after being found guilty of financial fraud totalling $10billion (£8.2billion).
Bankman-Fried, who founded the FTX crypto exchange, was convicted on all seven counts against him with the jury taking less than five hours to reach their verdict.
The month-long trial in Manhattan federal court had heard that Bankman-Fried looted FTX customers’ money out of greed and spent the money on himself.
Thursday's verdict came just short of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated $26billion personal fortune.
Bankman-Fried, who had pleaded not guilty to two counts of fraud and five counts of conspiracy, stood facing the jury with his hands clasped in front of him as the verdict was read out.
“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,” chief prosecutor Damian Williams told reporters outside the courthouse afterwards.
Bankman-Fried, who joins the likes of other cheats like Ponzi schemer Bernie Madoff and “Wolf of Wall Street” fraudster Jordan Belfort, wil be sentenced by judge Lewis Kaplan next March.
His defence lawyer Mark Cohen said Bankman-Fried “maintains his innocence and will continue to vigorously fight the charges against him.” He is set to go on trial again in March on a second set of charges, including alleged foreign bribery and bank fraud conspiracies.
Prosecutors argued during the trial that Bankman-Fried siphoned money from FTX to his crypto-focused hedge fund, Alameda Research, despite proclaiming on social media and in TV ads that the exchange prioritized the safety of customers’ funds.
Alameda used the money to pay its lenders and to make loans to Bankman-Fried and other executives — who in turn made speculative investments and donated $100million to US political campaigns in a bid to promote favourable cryptocurrency legislation. Bankman-Fried has been in jail since August after Judge Kaplan revoked his bail, fearing he had tampered with witnesses.
Three of his former close friends and colleagues, including ex-girlfriend Caroline Ellison, who had been chief executive of Alameda Research, pleaded guilty and agreed to testify against him in hopes of reducing their own sentences. They are to be sentenced at a later date.
During her testimony, star witness Ellison said Bankman-Fried’s dishevelled appearance was a calculated PR strategy as he cultivated an image as an eccentric crypto pioneer.
She said he thought his unruly hair had been “very valuable” to him and had earned him higher bonuses when he was a financial trader.
Former FTX director Nishad Singh had also testified in court that the company spent millions on celebrity partnerships in early 2022, and as part of the trial the jury was shown pictures of Bankman-Fried hanging out with singer Katy Perry and actor Orlando Bloom at the 2022 Super Bowl.
Bankman-Fried’s parents, Stanford law professors, broke down in court when the verdicts were delivered.
They had been sitting in the front row of the courtroom throughout the trial, and his mother Barbara fought back tears and put her fingers to her ears as the verdicts were read out.
