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Sam Bankman-Fried Guilty on All 7 Counts in FTX Fraud Trial

Crypto Sam Bankman-Fried, co-founder of FTX, has been found guilty of fraud, conspiracy, and money laundering by a jury in New York. The verdict was reached in less than five hours of deliberation and includes two counts of wire fraud, and four counts of conspiracy to commit fraud. Sam Bankman-Fried, co-founder of FTX, has been
 

Sam Bankman-Fried, co-founder of FTX, has been found guilty of fraud, conspiracy, and money laundering by a jury in New York. The verdict was reached in less than five hours of deliberation and includes two counts of wire fraud, and four counts of conspiracy to commit fraud.

 

Sam Bankman-Fried Guilty on All 7 Counts in FTX Fraud Trial
Sam Bankman-Fried, co-founder of FTX, has been found guilty of fraud, conspiracy, and money laundering by a jury in New York. The verdict was reached in less than five hours of deliberation and includes two counts of wire fraud, four counts of conspiracy to commit fraud, and one count of conspiracy to commit money laundering. The conviction could potentially lead to decades in prison, with sentencing scheduled for March 28.

Bankman-Fried’s defense attorney, Mark Cohen, has indicated that his client plans to appeal the conviction, maintaining his innocence and expressing disappointment with the outcome. The charges against Bankman-Fried paint a picture of one of the largest financial fraudsters in history, responsible for nearly $10 billion in losses suffered by victims. The jury found that FTX had misappropriated customer funds for lavish spending on luxury real estate, investments, and “dark money” political donations, all under Bankman-Fried’s direction.

U.S. Attorney Damian Williams expressed his zero-tolerance stance for such fraud and corruption, emphasizing that while the cryptocurrency industry and figures like Sam Bankman-Fried may be relatively new, the fraudulent activities in question are age-old.

Throughout the trial, the jury heard compelling testimonies from individuals closely associated with Bankman-Fried, including his former romantic partner Caroline Ellison, former FTX executives Nishad Singh and Gary Wang, and his college roommate Adam Yedidia. These witnesses, supported by documentary evidence, consistently implicated Bankman-Fried as the mastermind behind a wide-reaching scheme to misappropriate customer funds and deceive investors.

However, perhaps the most damaging testimony came from Bankman-Fried himself. Under cross-examination by prosecutor Danielle Sassoon, he faced his own words, which were used to expose a series of lies. Bankman-Fried claimed not to remember crucial details or statements over 140 times, a fact highlighted by prosecutor Nicolas Roos in his closing argument. Roos described the case as a “pyramid of deceit built by the defendant on a foundation of lies and false promises,” ultimately collapsing and leaving numerous victims in its wake.

Prosecutors outside the courthouse where Sam Bankman-Fried was convicted on Nov. 2, 2023. (Nik De/CoinDesk)
Prosecutors outside the courthouse where Sam Bankman-Fried was convicted on Nov. 2, 2023.

According to prosecutors, Bankman-Fried’s fraud was concealed as a financial innovation. They traced the misappropriation of customer funds back to 2021 when Bankman-Fried ordered Ellison to spend $2 billion to repurchase FTX’s stake held by the rival crypto exchange Binance. Despite her warning that they had only half the amount available and would need to borrow the rest from FTX customers, Bankman-Fried instructed her to proceed.

The prosecution argued that Bankman-Fried tapped customer funds once again in the fall to finance $3 billion in venture investments, despite warnings of potential ruin if the crypto market suffered.

While Bankman-Fried’s defense portrayed him as an overwhelmed entrepreneur who underestimated the risks and relied too heavily on his team, the prosecution presented a compelling case. Observers noted that the government’s evidence was presented cleanly, making it easy for the jury to reach a verdict.

The verdict comes a year after a CoinDesk article highlighted the close ties between Bankman-Fried’s companies, FTX and Alameda, leading to a series of events that ultimately resulted in the downfall of one of the cryptocurrency industry’s most prominent figures.

Charges Against Sam Bankman-Fried:

Federal prosecutors in the Southern District of New York brought an eight-count indictment, accusing Bankman-Fried of fraud and conspiracy.

The Commodity Futures Trading Commission (CFTC) filed fraud charges against him, with the aim of obtaining restitution for investors and customers through civil court proceedings.

The Securities and Exchange Commission (SEC) issued civil charges against Bankman-Fried, alleging his involvement in orchestrating a scheme to defraud equity investors.

FTX, once one of the largest crypto trading exchanges, made significant investments in advertising and secured high-profile endorsements from celebrities like Tom Brady and Larry David. Bankman-Fried had cultivated an image as a philanthropist and advocate for industry regulation, with his net worth estimated in the tens of billions at its peak.

Bankman-Fried expressed regret for the harm caused, stating:

“We thought that we might be able to build the best product on the market, It turned out basically the opposite of that. A lot of people got hurt.”

Wasif Shakir

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