In a stunning turn of events, Sam Bankman-Fried, once a crypto billionaire and the former head of the FTX crypto exchange, has been found guilty on Thursday in connection with the collapse of FTX.
After 15 days of trial and approximately four and a half hours of jury deliberation, he was convicted on seven counts of fraud and conspiracy.
As the verdict was read out, Bankman-Fried appeared visibly shaken, and his parents watched with concern. After the jury’s decision, his father, Joe Bankman, comforted his wife as their son left the courtroom, and Barbara Fried, Bankman-Fried’s mother, broke down in tears.
US Attorney Damian Williams commended the jury’s verdict, emphasizing the government’s zero tolerance for fraud and corruption. He noted that while figures like Sam Bankman-Fried may be relatively new, such acts of fraud and corruption have persisted throughout history.
Bankman-Fried’s defense attorney expressed disappointment with the verdict, stating, “We respect the jury’s decision, but we are very disappointed with the result.
Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him.
The sentencing hearing is scheduled for March 28, 2024.
The charges against Bankman-Fried include embezzlement of billions of dollars from FTX customer accounts and defrauding lenders associated with FTX’s sister company, Alameda Research, which held FTX customer funds in a bank account.
During the trial, Bankman-Fried acknowledged that he learned in 2020 about FTX customer funds being held by Alameda but took no action to protect them. When it became apparent in the fall of 2022 that Alameda owed $8 billion to FTX, no personnel changes were made.
Other charges that Bankman-Fried was found guilty of include defrauding FTX investors and a money laundering charge.
This verdict marks the conclusion of a yearlong saga that saw the 31-year-old Bankman-Fried transition from a billionaire living in a luxury apartment in the Bahamas to a defendant in one of the most significant white-collar crime cases since Bernie Madoff’s Ponzi scheme unraveled in 2009.
FTX was once a trusted name in the crypto industry, but its downfall sent shockwaves through the trillion-dollar crypto sector, leaving approximately one million customers facing potential losses. Prior to its collapse, FTX garnered millions of users and received support from high-profile backers like Tom Brady and Gisele Bundchen.
Founded by Bankman-Fried in 2019, FTX positioned itself as a secure and accessible platform for cryptocurrency trading. However, the exchange’s troubles began in 2022, culminating in its bankruptcy on November 11, 2022, triggered by a customer panic fueled by revelations of irregular financial transactions involving FTX and another firm owned by Bankman-Fried.
Unlike traditional bank customers, FTX depositors did not have access to a federal insurance fund to compensate them when their funds became inaccessible. Despite FTX’s assurances that it did not utilize customer deposits for any unauthorized purposes, Bankman-Fried’s other firm had been covertly redirecting deposits to cover various financial obligations, including repaying lenders, supporting executive lifestyles, engaging in crypto market speculation, and contributing to US political campaigns.
The implicated firm in these activities was Alameda Research, a hedge-fund-like crypto trading enterprise launched by Bankman-Fried in 2017.
