Sam Bankman-Fried faced the prospect of decades in prison Friday after a jury required less than five hours to convict the disgraced crypto billionaire on all counts linked to the collapse of the FTX trading platform and the theft of $10 billion from its customers and investors.
Bankman-Fried, x31, was found guilty of seven counts of wire fraud, conspiracy brought by the government late Thursday following a month-long trial that came nearly a year to the day after the implosion of FTX, the firm he founded and led since 2019.
Prosecutors were able to prove that Bankman-Fried funneled customer cash from the FTX platform to his wholly-owned hedge fund, Alameda Research, in order to make millions in political contributions, marketing and brand investments and the purchase of luxury real estate.
Damian William, lead attorney for the Southern District of New York, said Bankman-Fried "“perpetrated one of the biggest financial frauds in American history,” describing it as a "multibillion dollar scheme designed to make him the King of Crypto.”
Bankman-Fried showed little emotion as he was quickly escorted from the courtroom following the verdict, but appeared to make eye contact with his parents, Barbara Fried or Joseph Bankman, as the pair sobbed.
"Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him," said Bankman-Fried's lawyer, Mark Cohen, adding he was "very disappointed with the result" but "respected the jury's decision."
Judge Lewis Kaplan will sentence Bankman-Fried on March 28, with the maximum penalties on all counts indicating he could spend as much as 115 years in federal prison, although the ultimate total is likely to be far less.
"This case was always about fraud, and this outcome confirms that the jury understood who and what was on trial here," said Shelia Warren, CEO of the Crypto Council for Innovation. "The jury heard evidence that Sam Bankman-Fried was out for himself, and that's reflected in the verdict."
"This case serves as a reminder that rules that have existed for a long time created a path to accountability for these crimes," she added. "My hope is that we can turn the focus to the victims here rather than continuing to give airtime to the latest person who committed one of the oldest crimes on the books - fraud."
Bankman-Fried also faces the prospect of a second trial, related to his alleged violation of campaign finance laws, early next year while the now-bankrupt FTX issuing his parents for the recovery of "millions" in fraudulently transferred funds.
FTX, at one time the world's second largest crypto platform with a market value of around $32 billion, filed for Chapter 11 bankruptcy protection in November of last year amid a liquidity crisis. Multiple media reports have suggested that the situation was linked to the use of customer deposits to back risky trades made by the group's wholly owned hedge fund, Alameda Research.
John Ray, a corporate restructuring expert brought in to manage FTX's bankruptcy proceedings, said that a small group of inexperienced, unsophisticated and potentially compromised individuals" was key to the group's ultimate failure.
Bankman-Fried, who was arrested in the Bahamas the following month, is currently being held in prison in New York after breaching his bail conditions by releasing private correspondence with his former partner, and Alameda Research CEO Caroline Ellison, to The New York Times.
- Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
