Sam Bankman-Fried, founder of FTX, was found guilty of embezzling $8 billion from users of his defunct cryptocurrency exchange.
Following a month-long trial, a 12-member jury in Manhattan federal court found Bankman-Fried guilty on all seven counts against him. This means that Bankman-Fried might spend decades in jail when he is sentenced on March 28, 2024, by U.S. District Judge Lewis Kaplan.
About a year had passed since FTX declared bankruptcy in a sudden company collapse that rocked financial markets and destroyed his estimated $26 billion personal wealth.
After just over four hours of deliberation, the jury returned a verdict, according to a Reuters report.
The verdict represented a win for the U.S. Justice Department and Manhattan’s chief federal prosecutor, Damian Williams, who made it his mission to eradicate financial market misconduct.
Damian Williams during a session with reporters outside the courthouse, said:
“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.”
In a statement, his defense attorney Mark Cohen expressed his disappointment but acknowledged the jury’s verdict.
“Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him,” he said.
Earlier in his trial, Bankman-Fried stated in his testimony that Alameda “borrowed” money from the exchange rather than defrauding FTX consumers or taking their money.
The prosecution contended that Bankman-Fried misled investors and caused thousands of FTX investors to lose billions of dollars. They also said he was given numerous chances to be honest, but he chose to be more deceitful.
According to the DOJ’s December 2022 indictment, Bankman-Fried intentionally misled FTX clients by utilizing their deposits to finance investments in other businesses, settle debts with lenders, and cover other costs.
The jury and the court found that statement to be truthful after considering a ton of evidence and rendering a verdict.
After pleading guilty, former FTX executives Gary Wang and Nishad Singh, as well as former CEO of Alameda Caroline Ellison, testified for the prosecution, claiming he gave them orders to commit crimes, such as assisting Alameda in stealing from FTX and lying to lenders and investors about the companies’ financial situation.
The defense claimed that in an effort to obtain leniency at sentencing, the three—who have not yet received a sentence—falsely accused Bankman-Fried. Kaplan might be asked by prosecutors to consider their cooperation while determining the appropriate sentence.
