FTX founder Sam Bankman-Fried has been found guilty on all seven counts of fraud, conspiracy and money laundering following more than two weeks of testimony in one of the highest-profile financial crime cases in years.
The 31-year-old former cryptocurrency billionaire was convicted of two counts of wire fraud conspiracy, two counts of wire fraud and one count of conspiracy to commit money laundering, charges that each carry a maximum sentence of 20 years in prison. He was also convicted of conspiracy to commit commodities fraud and conspiracy to commit securities fraud, which each carry a five-year maximum sentence.
The MIT graduate steadfastly maintained his innocence since his arrest late last year after the startling implosion of FTX, the crypto exchange he co-founded, amid an $8 billion shortfall in funds and allegations he had used customer money to prop up his struggling hedge fund, Alameda Research.
Bankman-Fried was accused of using some of that money to buy real estate, make political contributions and finance pet charitable projects, among other purposes unconnected to FTX’s business of letting people buy and trade digital currencies.
More broadly, FTX’s bankruptcy in November of 2022 cast a cloud over the entire crypto industry, as the sudden collapse of other major industry players vaporized billions in client wealth.
Bankman-Fried’s attorney and federal prosecutors made closing arguments to a New York City juror on Wednesday after more than four weeks of testimony.
Witnesses for the prosecution included Caroline Ellison, Nishad Singh and Gary Wang, all of whom once worked for Bankman-Fried at FTX or Alameda and all of whom pleaded guilty to multiple charges including participating in an alleged scheme to defraud millions of customers.
The three accused him of orchestrating the use of FTX customer money to make purchases ranging from a luxury condo in the Bahamas to covering losses at Alameda, Bankman-Fried’s cryptocurrency hedge fund.
Ellison testified that Bankman-Fried directed her to siphon money from FTX customer accounts to fund investments and trading strategies at Alameda, where she was CEO until it and FTX collapsed. FTX co-founder Wang detailed how he and the defendant engaged in financial crimes and lied about it, while Singh, FTX’s former director of engineering, detailed how Bankman-Fried spent FTX money.
Defense attorneys sought to portray Bankman-Fried as a math nerd who made poor management decisions at FTX, but who had nothing criminal in mind while building his crypto empire.
Bankman-Fried testified that he believed Alameda’s spending came from corporate, not customer, funds, and that any mistakes he made were not ill-intentioned.
FTX was intended to “move the ecosystem forward,” he testified during the proceedings. “It turned out the opposite of that.”
Kaplan appeared skeptical of the arguments presented by Bankman-Fried’s lawyers. Kaplan also repeatedly interrupted Bankman-Fried’s testimony, at one point admonishing him to “just answer the question.”
“Jurors take their direction, whether it’s explicit or implicit, from a judge and [Kaplan] has also been pretty harsh with Sam Bankman-Fried’s lawyers. The jury doesn’t miss that,” according to CBS legal analyst Rikki Klieman, a former defense lawyer.
Prosecutors called 16 witnesses while the defense called three, including Bankman-Fried, who appeared close to tears as his lawyer wrapped up closing arguments, according to multiple news outlets.