He now faces decades in prison.
Former FTX CEO Sam Bankman-Fried arrives for a bail hearing at Manhattan Federal Court in New York City, on Aug. 11, 2023. (Michael M. Santiago/Getty Images)
Cryptocurrency guru Sam Bankman-Fried has been found guilty of fraud, money laundering, and more.
A 12-member New York jury convicted the 31-year-old FTX founder on all seven counts of fraud and conspiracy in relation to his role in a scheme that cheated customers and investors of at least $10 billion.
He now faces decades in prison. U.S. District Judge Lewis Kaplan set Mr. Bankman-Fried’s sentencing for March 28, 2024.
His defense attorneys, who raised objections to multiple decisions made by Judge Kaplan both prior to and during the trial, are expected to appeal the verdict.
But under cross-examination from prosecutors, he often spoke evasively and struggled to remember many events.
Prosecutors alleged that Mr. Bankman-Fried and other FTX executives knowingly misused customers’ money to fund losses at Alameda Research, a hedge fund that he owned, to splurge on a lavish lifestyle of beachfront homes, and to buy influence among regulators through political donations.
The trial featured the testimony of Mr. Bankman-Fried’s former partners and employees, all of whom had already pleaded guilty to fraud charges and were testifying for the prosecution.
These witnesses, including former Alameda CEO Caroline Ellison, former FTX chief technology officer Gary Wang, and former FTX director of engineering Nishad Singh testified that Mr. Bankman-Fried either directed or was aware of the misuse of funds.
He portrayed himself as a big-picture executive, who often became aware of bad practices by subordinates only after the fact.
He recalled, for example, telling Ms. Ellison that she had put investors at risk by failing to hedge, or protect, her positions at Alameda.
In response, he said: “She started crying. She agreed that Alameda should have hedged. She agreed that maybe Alameda shouldn’t have made certain venture investments. She offered to step down.”
Defense attorney Mark Cohen argued that his client did the best he could to explain to jurors how things went wrong, despite his best intentions.
“He did his best to remember and speak to you, he set out his memory as accurately as he could, and he told you what happened and, critically, what he believed in good faith at the time,” Mr. Cohen said.
Mr. Bankman-Fried said that one of his mistakes was failing to hire a chief risk officer, who could have prevented many of the failures at FTX and Alameda.
The prosecution, however, said that this was not an oversight but rather part of the plan to take customers’ money.
What has not been mentioned in this trial is the more than $100 million of FTX money that Mr. Bankman-Fried donated to politicians prior to FTX’s collapse.
He was the second-largest donor to President Joe Biden’s election campaign in 2020, contributing more than $5 million, and the second-largest donor to Democrat politicians and political action committees (PACs) in the 2022 midterms.
Other top recipients included Sens. Kirsten Gillibrand (D-N.Y.), Maggie Hassan (D-N.H.), Cory Booker (D-N.J.), Lisa Murkowski (R-Alaska), and Susan Collins (R-Maine).
A number of PACs, primarily those affiliated with the Democratic Party, also received large donations from Mr. Bankman-Fried.