Sam Bankman-Fried found guilty on all counts at fraud trial over crypto exchange FTX

Sam Bankman-Fried, as soon as hailed as a genius in cryptocurrency, was discovered responsible Thursday of all fraud counts in opposition to him, a yr after his trade, FTX, imploded and virtually worn out 1000’s of consumers.

The decision was reached round 7:40 p.m. ET, about 4 hours after the federal jury in Manhattan started deliberations.

Bankman-Fried, a co-founder of the digital forex trade FTX, was charged with seven counts of wire fraud, securities fraud and cash laundering that swindled prospects of FTX and lenders to its affiliated hedge fund, Alameda Analysis.

Bankman-Fried “perpetrated one of many largest monetary frauds in American historical past,” Damian Williams, the U.S. legal professional for the Southern District of New York, mentioned after the decision.

“The cryptocurrency business could be new; the gamers like Bankman-Fried could be new,” Williams mentioned. “However this sort of fraud, this sort of corruption, is as previous as time.”

Bankman-Fried faces as much as 110 years in jail. His sentencing is scheduled for March 28.

FTX and Alameda rapidly collapsed in November 2022 after a few of their monetary liabilities have been uncovered. The truth that Alameda had taken billions of {dollars} from FTX’s prospects and that a lot of Alameda’s steadiness sheet comprised digital forex property it had created, was central to the case in opposition to Bankman-Fried.

Unnerved by disclosures concerning the agency’s monetary place, lots of FTX’s prospects tried to get their a reimbursement. That set off the equal of a financial institution run.

The worth of Alameda’s investments crashed, and FTX couldn’t return a lot of that cash as a result of it had been given to Alameda. Some went to the fund’s lenders, and billions have been spent on sponsorships, commercials and loans to prime executives. That, too, was a significant a part of the case in opposition to Bankman-Fried.

A lot of FTX and Alameda’s leaders have been additionally charged after the corporations went beneath. Former Alameda CEO Caroline Ellison, FTX co-founder Gary Wang and FTX head of engineering Nishad Singh all pleaded responsible. They agreed to cooperate with the prosecution and testify in opposition to Bankman-Fried in trade for lighter sentences.

Whereas Bankman-Fried testified in his personal protection, it didn’t seem to have the identical weight because the insider testimony in opposition to him. The prosecution, in its closing argument, mentioned Bankman-Fried had answered “I can’t recall” 140 instances whereas he was being cross-examined.

Bankman-Fried’s legal professionals contended that he didn’t intend to defraud anybody and that the federal government was in search of somebody accountable after the failures of FTX and Alameda.

Bankman-Fried was requested to rise and face the jury because the verdicts have been learn Thursday, and he did so. He confirmed little emotion as every verdict was learn.

His father slumped in his seat, hunched over as every responsible verdict got here in. His mom was visibly emotional.

Mark S. Cohen, Bankman-Fried’s counsel, mentioned in an emailed assertion Thursday that Bankman-Fried’s authorized workforce respects the jury’s resolution however that they’re disenchanted.

“Mr. Bankman Fried maintains his innocence and can proceed to vigorously combat the fees in opposition to him,” he mentioned.

Forbes had as soon as estimated that Bankman-Fried’s stakes in Alameda and FTX have been value $26 billion. He was 29 on the time. However after the bankruptcies, that was gone. Prison fees adopted weeks later.

He additionally faces one other trial on fees of bribing international officers and different counts. That trial is scheduled to start in March, and he has pleaded not responsible to all fees.

On Thursday, Bankman-Fried was discovered responsible of two counts of wire fraud conspiracy, two counts of wire fraud, one depend of conspiracy to commit cash laundering, one depend of conspiracy to commit commodities fraud and one depend of conspiracy to commit securities fraud.

Williams, the prosecutor, mentioned Bankman-Fried’s conviction ought to ship a message to others.

“It’s a warning, this case, to each single fraudster on the market who thinks that they’re untouchable or that their crimes are too complicated for us to catch or that they’re too highly effective for us to prosecute or that they might attempt to speak their approach out of it once they get caught,” he mentioned. “These of us ought to suppose once more.”

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