Sam Bankman-Fried Convicted On Fraud Counts

Founder of FTX Sam Bankman-Fried has been convicted on all counts associated with the downfall of his cryptocurrency exchange, which is now bankrupt. This is the first of two criminal trials for the former CEO.

A Manhattan federal court jury in New York concurred with the prosecutors’ assertion that Bankman-Fried had engaged in fraudulent activities that harmed investors, customers, and lenders, contributing to the downfall of his cryptocurrency venture.

The prosecutors alleged that Bankman-Fried, who established and had authority over both FTX and the affiliated hedge fund Alameda Research, had misused and misappropriated billions of dollars from FTX customer deposits, engaged in deceptive practices to mislead investors, and directed other company executives to follow suit.

During the trial, he confronted seven charges, including counts of wire fraud and conspiracy. These charges collectively carry a potential maximum prison sentence of 110 years.

Judge Lewis Kaplan presided over the trial and scheduled a sentencing hearing for the morning of March 28.

Following the announcement of the conviction, Bankman-Fried’s attorney, Mark Cohen, expressed his disappointment with the outcome. He indicated that the defense is likely to appeal the verdict and emphasized that “Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him.”

After the verdict was announced, U.S. Attorney for the Southern District of New York Damian Williams said, “Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history. The cryptocurrency industry might be new. The players, like Sam-Bankman-Fried, might be new. But this kind of corruption is as old as time.”

During the trial, several individuals from Bankman-Fried’s close circle provided testimony against him. The principal witnesses for the prosecution included Caroline Ellison, Bankman-Fried’s former girlfriend and the former CEO of Alameda Research, alongside FTX co-founder Gary Wang and former FTX engineering head Nishad Singh. All three had previously entered guilty pleas and had committed to assisting the government in their case.

Bankman-Fried also testified in his own defense, acknowledging his errors but maintaining that he did not engage in any fraudulent activities or steal from anyone.

Bankman-Fried also gave testimony in his own defense, admitting to his mistakes while asserting that he did not partake in any fraudulent actions or commit theft against anyone.

Beyond the fraud and conspiracy allegations, Bankman-Fried is facing accusations of breaching campaign finance regulations by channeling FTX customer funds for extensive political contributions through an unlawful straw-donor arrangement. He is also alleged to have engaged in bribery of Chinese officials.

The second legal trial involving Bankman-Fried is scheduled to commence in March 2024. He has entered a plea of not guilty to all the charges brought against him.