top of page
  • Writer's pictureJamal Saafir

Sam Bankman-Fried Found Guilty

Updated: Nov 22, 2023

According to a report from Reuters, FTX founder Sam Bankman-Fried (SBF) was found guilty on Thursday of stealing from customers of his now-bankrupt crypto exchange in one of the largest documented monetary frauds to date.

A jury of twelve in Manhattan federal court convicted SBF on all seven counts being brought against him after a month-long trial in which prosecutors established the narrative that he purloined $8 billion from the exchange's users out of pure avarice.

The verdict was handed down almost one year after the FTX exchange filed for bankruptcy in a sudden corporate disaster that shook financial markets and decimated his estimated $26 billion personal fortune.

The jury arrived at its decision after four hours of deliberations. Bankman-Fried, who had pleaded not guilty to two counts of fraud and five counts of conspiracy, stood facing the jury with his hands clasped in front of him as the verdict was read.

Damien Williams, SDNY

The conviction was a triumph for the United States Justice Department and Damian Williams, the leading federal prosecutor in Manhattan, who made exposing corruption in financial markets one of his main objectives.

"The crypto industry might be new, the players like Sam Bankman-Fried may be new, but this kind of fraud is as old as time and we have no patience for it," Williams told reporters outside the courthouse.

Once admired and respected in the cryptosphere, Bankman-Fried - who was known for his head of ungroomed curly hair and for wearing beach clothes in place of a business suit - finds a place in history among the likes of admitted Ponzi schemer Bernie Madoff and "Wolf of Wall Street" fraudster Jordan Belfort as influential people convicted of major U.S. financial crimes.

U.S. District Judge Lewis Kaplan set Bankman-Fried's sentencing for March 28th, 2024. SBF could face decades in prison.

Bankman-Fried’s defense attorney Mark Cohen said in a statement that he was "disappointed" but valued the jury's verdict.

"Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him," he said.

U.S. District Judge Lewis Kaplan

After Kaplan exited the court, Cohen put his arm around SBF as they conferred at the defense table.

As Bankman-Fried exited the courtroom with members of the U.S. Marshals service, he turned around and nodded at his parents, the Stanford Law School professors Joseph Bankman and Barbara Fried, who were seated in the courtroom audience's front row. Fried looked toward him and crossed her arm across her chest.

Bankman-Fried is scheduled for trial next March on a second set of charges brought by prosecutors earlier this year, including for alleged foreign bribery and bank fraud conspiracies.

The details leading up to the conviction:

During the trial, prosecutors argued that Bankman-Fried funneled money from FTX to his crypto-focused hedge fund, Alameda Research, in spite of its social media and television advertisements that claimed that the exchange prioritized the safety of customer funds.

Alameda used the money to compensate its lenders and to make loans to Bankman-Fried and other executives - who in turn made uncertain venture investments and donated roughly over $100 million to United States political campaigns in a bid to encourage cryptocurrency legislation he deemed as beneficial to his business, according to prosecutors.

Bankman-Fried took on the responsibility and risk associated with testifying in his own defense over several days near the conclusion of his trial after three former members of his inner circle took the stand against him. He was met with aggressive cross-examination by the prosecution, often circumventing direct answers to the most probing questions.

He testified to making mistakes in the operation of FTX, such as not developing a risk-management team, but denied stealing customer funds. He said that he thought Alameda's borrowing from FTX was permissible and was not aware how massive its debts had grown until shortly before both companies caved.

"We thought that we might be able to build the best product on the market," Bankman-Fried testified. "It turned out basically the opposite of that."

The prosecution presented a different version of events.

"He didn't bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits - billions and billions of dollars - to give himself money, power, influence. He thought the rules did not apply to him. He thought that he could get away with it," prosecutor Danielle Sassoon told the jury on Thursday.

The jury heard 15 days of testimony. Former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, testified for the prosecution after entering guilty pleas, stating that he instructed them to perpetrate crimes, including helping Alameda steal from FTX and lying to lenders and investors about the companies' financial standing.

The defense argued the three, who have not yet been sentenced, falsely incriminated Bankman-Fried in an attempt to gain mercy at sentencing. Prosecutors may ask Kaplan to consider their cooperation when deciding their punishment.

Sam Bankman-Fried has been incarcerated since August of 2023 after Judge Kaplan revoked his bail, having gathered he likely tampered with witnesses.

1 view0 comments


bottom of page