FTX founder Sam Bankman-Fried found guilty in federal fraud and conspiracy trial

A jury has found FTX founder Sam Bankman-Fried guilty on all charges in his federal fraud and conspiracy trial.

The jury deliberated for a little over four hours before reaching a verdict on Thursday.

“We will have decorum in the courtroom when the verdict is announced,” Judge Lewis Kaplan said before the reading.

Bankman-Fried, 31, sat motionless at the defense table in an ill-fitting grey suit. He was made to stand and face the jury for the reading. He showed no emotion.

Bankman-Fried was charged with seven counts of fraud, conspiracy and money laundering in what federal prosecutors have described as “one of the biggest financial frauds in American history.”

He was accused of using customer deposits on the crypto trading platform FTX to cover losses at his hedge fund, pay off loans and buy lavish real estate, among other personal expenses.

He pleaded not guilty to all counts. With the conviction on all charges, he could face a sentence of up to 110 years in prison. His sentencing was scheduled for March 28, 2024.

Judge Kaplan said a second trial of counts that had been severed is currently scheduled for March 11, 2024.

“I would tell the government to let me know by Feb. 1 whether that’s going to proceed,” the judge said.

Bankman-Fried stepped down from his role at FTX in November 2022 amid a rapid collapse that ended with the company — once valued at $32 billion at its peak — declaring bankruptcy. Prosecutors charged Bankman-Fried the following month with an array of alleged crimes focused on a scheme to defraud investors.

During the month-long trial in Manhattan federal court, the prosecution laid out the case that this was an elaborate and intentional fraud, while the defense tried to deflect blame for the FTX collapse and characterized Bankman-Fried as a nave math geek.

While testifying in his own defense, Bankman-Fried conceded on the witness stand that he made mistakes but said he committed no fraud.

Bankman-Fried also testified that he only learned two months before FTX collapsed into bankruptcy that Alameda had spent $8 billion of FTX customer funds.

Caroline Ellison, the former co-chief executive of Alameda and Bankman-Fried’s ex-girlfriend, previously pleaded guilty to criminal charges and testified under a cooperation agreement with prosecutors. She has testified that she committed fraud with Bankman-Fried and at his direction.

Ellison additionally testified that Bankman-Fried believed in utilitarianism and thought rules against lying or stealing inhibited his ability to maximize the greatest benefit for the most people.

FTX co-founder Gary Wang also admitted to committing wire fraud, securities fraud and commodities fraud with other people, including Bankman-Fried, during his testimony. Wang agreed to testify under an agreement with the government after previously pleading guilty to fraud charges.

Leave comment

Your email address will not be published. Required fields are marked with *.