The founder of one of the largest cryptocurrency exchanges in the world, who “thought that he was above the law”, defrauded clients out of billions of dollars.
A jury found the founder of FTX guilty on seven counts of criminal fraud, closing a chapter on one of the most publicised trials of the cryptocurrency world.
The jury delivered the verdict after less than five hours of deliberations, leaving the judge to decide on a sentence that could send Bankman-Fried to prison for as many as 115 years.
The former billionaire, 31, was arrested in the Bahamas and extradited to the US after FTX went bankrupt last year. The downfall of the crypto exchange and its sister hedge fund Alameda Research rattled financial markets and caused Bankman-Fried to lose his estimated $26bn (£21bn) fortune.
“Sam Bankman-Fried thought that he was above the law,” said attorney-general Merrick Garland. “Today’s verdict proves he was wrong.”
The ‘crypto king’ was accused of having stolen at least $10bn (£8bn) of his customers’ money and using the money for risky bets at Alameda.
He was found guilty of wire fraud and conspiracy to commit wire fraud against FTX customers and Alameda lenders, conspiracy to commit securities fraud, conspiracy to commit commodities fraud against FTX investors, and conspiracy to commit money laundering.
Bankman-Fried had pleaded not guilty to all charges, but he admitted to having committed “mistakes” in his leadership of FTX.
“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,” said Bankman-Fried’s lawyer, Mark Cohen.
The trial, which began in early October, saw Bankman-Fried’s former close friends and top lieutenants – including former Alamedas CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh.
The three have pleaded guilty of their involvement in the case, but hoped their cooperation would see their sentence reduced. They said Bankman-Fried told them to help Alameda loot funds from FTX and lie to lenders and investors.
“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history,” said Damian Williams, US attorney for the Southern District of New York, after the verdict was read. “While the cryptocurrency industry might be new and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time. This case has always been about lying, cheating and stealing, and we have no patience for it.”
Bankman-Fried’s fall from grace has been compared to that of well-known financial fraudsters Bernie Madoff and ‘Wolf of Wall Street’ Jordan Belfort, and also showed similarities with Elizabeth Holmes’s trial.
The FTX founder will be sentenced at a hearing in March 2024.
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