A jury has found Sam Bankman-Fried guilty of all seven criminal counts against him. The FTX founder faces a maximum sentence of 115 years in prison.
Bankman-Fried, the 31-year old son of two Stanford legal scholars and graduate of Massachusetts Institute of Technology, was convicted of wire fraud and conspiracy to commit wire fraud against FTX customers and against Alameda Research lenders, conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors, and conspiracy to commit money laundering.
He had pleaded not guilty to the fees, which were all tied to the collapse late last yr of FTX and sister hedge fund Alameda.
“Sam Bankman-Fried perpetrated considered one of the largest financial frauds in American history,” Damian Williams, U.S. attorney for the Southern District of Latest York, said in a briefing after the verdicts were read. “The cryptocurrency industry could be latest. The players like Sam Bankman-Fried, Fried could be latest. But this sort of fraud, this sort of corruption, is as old as time and we have now no patience for it.”
The trial, which began in early October, pitted the testimony of Bankman-Fried’s former close friends and top lieutenants against the sworn statements of their former boss and ex-roommate. The jury returned a swift verdict after receiving the case at around 3:15 p.m. on Thursday and breaking for dinner at around 6 p.m.
At 7:37 p.m., the attorneys began to rush back into the courtroom, and the clerk said “the jury has reached a verdict.” A minute later, the jury was back within the room.
Joseph Bankman and Barbara Fried arrive for the trial of their son, former FTX Chief Executive Sam Bankman-Fried, who’s facing fraud charges over the collapse of the bankrupt cryptocurrency exchange, at Federal Court in Latest York City, U.S., October 26, 2023.
Brendan Mcdermid | Reuters
Bankman-Fried’s parents were visibly nervous entering the courtroom. They sat within the second pew, and took turns putting their arms around one another. When the defendant, wearing a purple tie and a black suit, returned to the table along with his attorneys, he leaned back in his chair. He didn’t flinch and stared straight ahead.
From the highest floor of the lower Manhattan courthouse, Judge Lewis Kaplan, who presided over the trial, instructed Bankman-fried to face and face the jury box because the verdicts were read. The one two people standing were the forewoman and the defendant.
By 7:47 p.m., all counts had been read. Bankman-Fried remained stoic. He didn’t cry.
Immediately after the guilty verdicts, Bankman-Fried’s attorney, Mark Cohen, asked jurors to be polled. They went juror by juror, and every was asked if their verdict was read properly. Each said yes.
Judge Kaplan thanked the jurors for his or her service, they usually were escorted out.
Kaplan then asked concerning the second trial Bankman-Fried is facing on March 11. The federal government has until Feb. 1 to to let the court know if it it plans to still proceed. The sentencing date is March 28 at 9:30 a.m.
At around 8:02 p.m., Bankman-Fried began to walk to a side room. His parents were standing on the front of the middle aisle, waiting for his or her son.
Following the decision, Cohen said in an announcement that Bankman-Fried “maintains his innocence and can proceed to vigorously fight the fees against him.”
Friends turned on him
The monthlong trial was highlighted by testimony from the federal government’s key witnesses, including Caroline Ellison, Bankman-Fried’s ex-girlfriend and the previous head of Alameda, and FTX co-founder Gary Wang, who was Bankman-Fried’s childhood friend from math camp. Each pleaded guilty in December to multiple charges and cooperated as witnesses for the prosecution.
Many of the defense’s case was built on the testimony of Bankman-Fried himself, who told the court that he didn’t commit fraud or steal customer money, but just made some business mistakes.
FTX founder Sam Bankman-Fried is questioned by defense lawyer Mark Cohen during his fraud trial over the collapse of the bankrupt cryptocurrency exchange, before U.S. District Judge Lewis Kaplan at federal court in Latest York City, U.S., October 31, 2023 on this courtroom sketch.
Jane Rosenberg | Reuters
The central query for jurors to think about was whether Bankman-Fried acted with criminal intent in taking customer funds from FTX and using that cash to pay for real estate, enterprise investments, corporate sponsorships, political donations and to cover losses at Alameda after crypto prices plunged last yr.
Assistant U.S. Attorney Nicolas Roos told the court in his closing argument on Wednesday, there was “no serious dispute” that $10 billion in customer money that was sitting in FTX’s crypto exchange went missing. The problem, he said, is whether or not Bankman-Fried knew that taking the cash was mistaken.
“The defendant schemed and lied to get money, which he spent,” Roos said.
Bankman-Fried now awaits sentencing. His case has been in comparison with that of Elizabeth Holmes, the founding father of medical device company Theranos, which ceased operations in 2018.
Holmes, 39, was convicted in early 2022 on 4 counts of defrauding investors in Theranos after testifying in her own defense. She was sentenced to greater than 11 years in prison, and commenced serving her punishment in May at a minimum-security facility in Bryan, Texas.
— CNBC’s Dawn Giel contributed to this report
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