Sam Bankman-Fried Guilty on All 7 Counts in FTX Fraud Trial

Sam Bankman-Fried defrauded his customers and lenders, a New York jury found after a five-week trial for the FTX founder and former chief executive.

The jury reached the guilty verdicts on all seven charges on the first anniversary, coincidentally, of the award-winning CoinDesk scoop that spurred the former crypto mogul’s downfall.

“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history,” U.S. Attorney Damian Williams said outside the courthouse after the guilty verdicts were revealed. “This kind of fraud, this kind of corruption is as old as time. We have no patience for it.”

Jurors began deliberating a little after 3 p.m. ET. Just before 7:40 p.m., the judge said they had reached a verdict. The attorneys and Bankman-Fried returned to the courtroom and the guilty verdict was read out shortly thereafter to the packed courtroom.

“The verdict unanimous, your honor,” was the message from the 12 New Yorkers who voted guilty on all seven counts. The judge thanked jurors for their service.

A tentative sentencing date was set for March 28, 2024. Bankman-Fried could spend decades in prison (and theoretically up to 115 years).

An appeal seems likely: In a statement, defense attorney Mark Cohen said Bankman-Fried respects the jury’s decision but maintains his innocence and will continue to “vigorously fight the charges.”

The backstory

Bankman-Fried, 31, was arrested last December and tried on allegations of defrauding FTX investors and customers, and Alameda Research’s lenders. The once-prominent crypto exchange CEO pleaded not guilty to all charges, and went to trial at the beginning of October, where federal prosecutors sought to paint him as someone who deliberately set out to steal his customers’ funds – around $8 billion – for use in a variety of purchases and investments, including real estate, sports sponsorships and venture investments. His defense team argued that Bankman-Fried was an overworked businessman who made the mistake of assuming the company funds he used belonged to those companies, rather than their customers or investors.

Bankman-Fried himself acknowledged that “there were significant oversights,” but said he did not defraud anyone or set out to take their funds on the stand.

“A lot of people got hurt – customers, employees – and the company ended up in bankruptcy,” Bankman-Fried said on his first day of testimony before the jury. “… I made a number of small mistakes and a number of larger mistakes.”

FTX collapsed about a year ago, after a CoinDesk article revealed that Alameda held a massive amount of FTX’s exchange token, FTT, which combined with tweets from Binance CEO Changpeng Zhao sparked what Bankman-Fried described as a “run on FTX” – ultimately leading to FTX, Alameda and the companies’ various subsidiaries to file for bankruptcy.

Key FTX and Alameda executives, including former Chief Technology Officer Gary Wang, former Head of Engineering Nishad Singh and former Alameda CEO Caroline Ellison, all testified against Bankman-Fried during the trial, saying they all pleaded guilty to various charges but had taken direction from the MIT grad who co-founded the companies. A number of other former employees similarly testified that Bankman-Fried set the direction for FTX’s operations. Bankman-Fried himself, however, argued that he trusted his handpicked lieutenants to safely operate the companies while he was busy with his own roles as the head of the multibillion-dollar empire, including being the public face and lobbying regulators and lawmakers.

All told, Bankman-Fried was charged with wire fraud and conspiracy to commit wire fraud against FTX’s customers, wire fraud and conspiracy to commit wire fraud against Alameda’s lenders, conspiracy to commit securities fraud against FTX’s investors, conspiracy to commit commodities fraud against FTX’s customers and conspiracy to commit money laundering.