FTX founder Sam Bankman-Fried found guilty of defrauding customers

FTX founder Sam Bankman-Fried has been found guilty on all charges, including defrauding customers of his now-bankrupt cryptocurrency exchange in one of the biggest financial frauds on record, on Thursday (Nov 2). 

The 12-member jury in Manhattan federal court moved to convict the 31-year-old former billionaire on all seven counts he faced after a months-long trial. 

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

In the months-long case, prosecutors argued that Bankman-Fried stole $8 billion from the exchange’s customers out of sheer greed. 

“Find him guilty,” prosecutor Danielle Sassoon told the jury earlier. “He was ambitious” and had “the arrogance to think that he could get away with a fraud,” she added.

The jury’s verdict came after some four hours of deliberation and also nearly a year after FTX filed for bankruptcy in a swift corporate meltdown which shocked financial markets. 

Bankman-Fried, who had pleaded not guilty to two counts of fraud and five counts of conspiracy, was seen facing the jury with his hands clasped in front of him as the verdict was being read. He sat with his head in his hands after the verdict. 

The verdict also marks a win for the US Justice Department and Damian Williams, the top federal prosecutor in Manhattan, who has sought to rid financial markets of corruption. 

“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,” Williams told reporters outside the courtroom.

Bankman-Fried, whose conviction on all charges could lead to a sentence of up to 110 years in prison, was seen exiting the Manhattan federal courtroom Thursday night with his head down. US District Judge Lewis Kaplan has set the once-crypto mogul’s sentencing for March 28, 2024. 

Bankman-Fried’s defence lawyer Mark Cohen following the verdict, in a statement, said he was “disappointed” but respected the jury’s decision, adding that the former FTX chief “maintains his innocence and will continue to vigorously fight the charges against him.” 

The trial revolves around accusations of FTX defrauding its customers to support its Alameda Research hedge fund, and making substantial donations to political campaigns in the United States. 

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

Earlier this week, in his latest testimony, Bankman-Fried expressed “regret” for failing to investigate the billion-dollar debt his hedge fund borrowed from the cryptocurrency exchange before its collapse last November. 

The jury also heard 15 days of testimony from former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh who were testifying for the prosecution after entering guilty pleas. All three of them have not yet been sentenced. 

Bankman-Fried is also set to go on trial on a second set of charges brought by prosecutors which includes alleged foreign bribery and bank fraud conspiracies.