Sam Bankman-Fried, the co-founder of the now-bankrupt crypto exchange FTX, has been found guilty of fraud and conspiracy by a jury in a New York court. Bankman-Fried faced a total of seven counts and was convicted on all of them, leaving him awaiting sentencing with the possibility of up to 115 years in prison.
The verdict was reached swiftly, with the jury announcing their decision just hours after the trial concluded. Bankman-Fried, known for his prominent role in the crypto industry, displayed little emotion upon hearing the verdict. On the other hand, his parents, who have consistently claimed their son is innocent, appeared distraught.
Bankman-Fried Former Girlfriend Testimony
Bankman-Fried was accused of overseeing a multibillion-dollar fraud. The prosecution alleged that customer funds from FTX were funnelled into another company, Alameda Research, to finance high-risk trades, personal loans, political donations, and a lavish lifestyle in the Bahamas. FTX ultimately collapsed in November 2022, unable to meet customer withdrawal demands. The collapses saw many people lose deposits. This includes A-listers like NFL star Tom Brady who lost US$ 30 million.
The defence argued that Bankman-Fried’s actions were those of a rational businessperson facing challenging market conditions. They insisted that he was an investor, not someone looking to defraud anyone. In an unconventional move, Bankman-Fried even took the stand in his defence. His stance did not sway the jury who sided with the prosecution.
During the trial, Bankman-Fried’s inner circle, former customers, and investors took to the stand to testify against him. Some of them had also incurred losses in FTX’s downfall. A key witness was Caroline Ellison, CEO of Alameda Research and Bankman-Fried’s former girlfriend. She portrayed him as reckless, forceful, and calculating. She described his various deceptions and the manipulation of his public image. Her emotional testimony about guilt over stolen funds and relief, when FTX began to crumble, left an impact on the jury.
Conviction a Message to Criminals
The U.S. Department of Justice sees this conviction as a significant victory in the realm of cryptocurrency. It is the first high-profile success against crypto-related crimes. Despite the charges being traditional fraud, Bankman-Fried’s stature in the crypto industry added symbolic importance to the case. The DOJ’s message is clear: “fraudulent practices in the crypto industry will not be tolerated.”. The conviction also sends a message across the globe that fraudsters have taken to cryptocurrency to launder their gains.
Now, Judge Lewis Kaplan will determine Bankman-Fried’s sentence, expected to be less than the maximum of 115 years. Additionally, Bankman-Fried faces another trial in March 2024, with five more charges brought by the Justice Department after his initial arrest. The split trial strategy made his defence an uphill battle. With this approach, he only needed to be convicted of just one count in either of the trials for the judge to impose a jail sentence.