A Manhattan federal jury Thursday convicted Sam Bankman-Fried of stealing $10 billion from users of his crypto exchange and lying to lenders and investors — capping a fall from grace for an ex-billionaire once viewed as one of the crypto world’s brightest stars.
The technology magnate has been convicted on all seven counts of fraud and conspiracy related to his plan to misappropriate funds from FTX exchange users. He used these ill-gotten gains to settle debts incurred by his struggling hedge fund, Alameda Research, and acquire extravagant real estate properties. This series of events ultimately resulted in the collapse of FTX approximately a year ago, leaving numerous individuals unable to access their funds.
He could potentially be sentenced to a maximum of 110 years in prison when the sentencing takes place on March 28. During the announcement of the verdict in a crowded federal courtroom in Manhattan on Thursday evening, the 31-year-old Bankman-Fried, dressed in a gray suit and a purple tie, remained composed, standing with his hands folded in front of him.
While being escorted from the courtroom, he glanced back and briefly acknowledged his deeply concerned parents, Barbara Fried and Joseph Bankman, both professors at Stanford Law School. They had approached the front row of the courtroom gallery in an attempt to communicate with him.
Following this, Bankman-Fried’s mother lowered her head into her hands. The jury, consisting of nine women and three men, reached their decision after only four hours of deliberation. The conviction of the former cryptocurrency prodigy came after a trial that spanned a month, during which Bankman-Fried made the uncommon and daring decision to testify on his behalf.
Over the course of four days while testifying, he asserted on over 100 occasions that he could not recollect making repeated assurances about the safety of his platform or giving instructions for a subordinate to establish covert computer code that would enable Alameda to divert funds from FTX customers.
The confident mathematics prodigy was subsequently presented with an extensive collection of tweets, emails, appearances before Congress, and media interviews that clearly demonstrated that he had indeed made numerous statements he professed not to recollect.
Bankman-Fried declared that the financial troubles of his companies were the result of genuine errors, not criminal activities.
He frequently professed a lack of memory regarding his alleged orders for Alameda, which he had publicly characterized as a neutral market infrastructure, to establish an unprecedented arrangement allowing it to access FTX funds with an almost limitless credit line.
Bankman-Fried attributed the collapse to deficiencies in risk management and claimed that he was unaware of his hedge fund’s borrowing of billions from his exchange until just days prior to the implosion.
Federal prosecutors strongly criticized these assertions, along with numerous other statements made by Bankman-Fried during his tenure at FTX, as components of a deceptive scheme designed to conceal the fallen cryptocurrency figure’s involvement in orchestrating a massive fraud.
The jury also received testimony from individuals who had invested in cryptocurrency through FTX and ended up losing their money.
The first federal witness, French cocoa trader Marc-Antoine Julliard, shared that he was unable to withdraw approximately $100,000 in funds he had entrusted to FTX. This occurred after he had seen advertisements and interviews portraying Bankman-Fried as the future icon of the cryptocurrency industry.
During his testimony, Bankman-Fried appeared to display little or no emotion as he recounted his perspective on why his companies went under. Nevertheless, he conceded that the downfall of his businesses marked a significant departure from his initial aspirations when he established FTX in 2019.