FTX founder Sam Bankman-Fried has been found guilty on all seven counts of fraud, conspiracy, and money laundering following an extensive two-week trial, marking one of the most significant financial crime cases in recent memory.
The 31-year-old former cryptocurrency billionaire was convicted on two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering, each of which carries a maximum prison sentence of 20 years. He was also found guilty of conspiracy to commit commodities fraud and conspiracy to commit securities fraud, which carry a maximum sentence of five years.
Damian Williams, U.S. attorney for the Southern District of New York, declared, “Sam Bankman-Fried perpetrated one of the biggest frauds in American history, a multibillion-dollar scheme designed to make him the king of crypto. The cryptocurrency industry may be new, but this kind of fraud is as old as time, and we have no patience for it.”
Bankman-Fried, an MIT graduate, had maintained his innocence since his arrest after the collapse of FTX amid an $8 billion shortfall in funds. He faced allegations of using customer funds to support his hedge fund, Alameda Research, as well as for personal expenses such as real estate, political contributions, and charitable projects unrelated to FTX’s business.
An attorney for Bankman-Fried, Mark S. Cohen, expressed disappointment with the verdict, stating, “Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him.”
The fallout of FTX’s bankruptcy in November 2022 cast a shadow over the entire cryptocurrency industry, erasing billions in client wealth due to the sudden collapse of other major industry players.
The trial’s conclusion marked a dramatic downfall for Bankman-Fried, who believed in the solvency of his billion-dollar empire just twelve months prior. His former employees, like Natalie Tien, expressed a sense of catharsis, having witnessed their once-respected boss face justice.
U.S. Attorney Merrick Garland emphasized, “Today’s verdict proves he was wrong. This case should send a clear message to anyone who tries to hide their crimes behind a shiny new thing they claim no one else is smart enough to understand: the Justice Department will hold you accountable.”
The sentencing of Sam Bankman-Fried now rests in the hands of Judge Lewis Kaplan, with the charges carrying a statutory minimum of 110 years. Sentencing guidelines offer a formula, but the judge has significant discretion to rule below or above those guidelines, potentially considering perjury allegations.
As the legal battle continues, the next trial in the United States vs. Sam Bankman-Fried is scheduled for March 11, 2024, where additional charges will be incorporated into the ongoing proceedings. This trial concludes almost one year after FTX ceased customer withdrawals, marking the beginning of the end of the crypto king’s meteoric rise.