FTX founder Sam Bankman-Fried was found guilty of multi-billion-dollar fraud

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  • Sam Bankman Fried has been found guilty of fraud and conspiracy by a jury in a court in New York.
  • The founder of bankrupt crypto exchange FTX was convicted on all of the seven counts on which he was tried. He awaits sentencing.
  • The verdict came just shy of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated $26 billion personal fortune.
  • Bankman-Fried is set to go on trial next March on a second set of charges brought by prosecutors earlier this year, including for alleged foreign bribery and bank fraud conspiracies.
  • Bankman-Fried has been jailed since August after Kaplan revoked his bail, having concluded he likely tampered with witnesses.

FTX founder Sam Bankman-Fried was found guilty on Thursday of stealing from customers of his now-bankrupt cryptocurrency exchange in one of the biggest financial frauds on record, a verdict that cemented the 31-year-old former billionaire’s fall from grace.

 

A 12-member jury in Manhattan federal court convicted Bankman-Fried on all seven counts he faced after a monthlong trial in which prosecutors made the case that he looted $8 billion from the exchange’s users out of sheer greed.

 

The verdict came just shy of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated $26 billion personal fortune.

 

The conviction was a victory for the U.S. Justice Department and Damian Williams, the top federal prosecutor in Manhattan, who made rooting out corruption in financial markets one of his top priorities.

 

Once the darling of the crypto world, Bankman-Fried – who was known for his mop of unkempt curly hair and for wearing shorts and T-shirts rather than business attire – joins the likes of admitted Ponzi schemer Bernie Madoff and “Wolf of Wall Street” fraudster Jordan Belfort as notable people convicted of major U.S. financial crimes.

 

U.S. District Judge Lewis Kaplan set Bankman-Fried’s sentencing for March 28, 2024. The Massachusetts Institute of Technology graduate could face decades in prison. His defense lawyer Mark Cohen said in a statement that he was “disappointed” but respected the jury’s decision.

 

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

 

Bankman-Fried’s was the first of several blockbuster cases Williams brought against former high-flying cryptocurrency executives to go to trial. Several crypto companies went bankrupt last year after the prices of bitcoin and other digital assets collapsed following a years-long boom.

 

Prosecutors argued during the trial that Bankman-Fried siphoned money from FTX to his crypto-focused hedge fund, Alameda Research, despite proclaiming on social media and in television advertisements that the exchange prioritized the safety of customer funds.

 

Bankman-Fried took the calculated risk of testifying in his own defense over three days near the close of trial after three former members of his inner circle testified against him. He faced aggressive cross-examination by the prosecution, often avoiding direct answers to the most probing questions.

 

The jury heard 15 days of testimony. Former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, testifying for the prosecution after entering guilty pleas, said he directed them to commit crimes, including helping Alameda loot FTX and lying to lenders and investors about the companies’ finances.

 

The defense argued the three, who have not yet been sentenced, falsely implicated Bankman-Fried in a bid to win leniency at sentencing. Prosecutors may ask Kaplan to take their cooperation into account in deciding their punishment.

 

Bankman-Fried has been jailed since August after Kaplan revoked his bail, having concluded he likely tampered with witnesses.

 

(With inputs from agencies) 

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