In a new verdict from a New York federal court, Sam Bankman-Fried, 31, also known as SBF, the co-founder and former CEO of the defunct cryptocurrency exchange FTX, was convicted on several charges. After a trial lasting several weeks, a jury of 12 found Bankman-Fried guilty of all seven charges he faced, including fraud and conspiracy, in the wake of the exchange’s collapse and the significant financial losses to its customers.
The trial, which highlighted allegations of an $8 billion misappropriation from FTX customer funds, concluded with the jury delivering a verdict in less than five hours of deliberation. The sentencing for Bankman-Fried is scheduled for late March of 2024, and there is an expectation of an appeal from his defense team, which had previously raised concerns about certain decisions made by U.S. District Judge Lewis Kaplan throughout the proceedings.
Once a prominent figure in the cryptocurrency industry, Bankman-Fried’s conviction aligns him with other high-profile financial crime convictions in U.S. history. The trial exposed how customer funds were allegedly redirected from FTX to a hedge fund managed by Bankman-Fried, Alameda Research. The prosecution asserted that these funds were used for a variety of purposes, including loans to executives and political donations aimed at influencing cryptocurrency legislation in favor of his business interests.
SBF was charged with a multitude of crimes in his mismanagement of customer funds stored through the crypto exchange, funneling money to himself and his family. Around $8 billion dollars were estimated to be missing from customer funds, which eventually led to the company going bankrupt in November of 2022 after being initially founded in 2019 with the promise of protecting customers’ financial assets and allowing them to exchange them freely.
The company advertised itself using many pathways, including through the endorsement of several “A-list” celebrities and figures, as well as prominent members of some online financial institutions often involved in crypto spheres. Expensive FTX ads were also taken out in a number of instances including Super Bowl ads and stadium sponsorship. Prosecutors outlined the embezzlement as a “pyramid of deceit” over the years of operation of the exchange that collapsed upon SBF when the market turned and his fraud was revealed. SBF had originally pled not guilty to the charges.
After deliberation was set in motion by a judge, SBF was found guilty of today by a jury of his peers in a NY federal court on these counts:
- Count one: Wire fraud on customers of FTX
- Count two: Conspiracy to commit wire fraud on customers of FTX
- Count three: Wire fraud on Alameda Research lenders
- Count four: Conspiracy to commit wire fraud on lenders to Alameda Research
- Count five: Conspiracy to commit securities fraud on investors in FTX
- Count six: Conspiracy to commit commodities fraud on customers of FTX
- Count seven: Conspiracy to commit money laundering
As opposed to bank customers, FTX depositors weren’t protected by a federal insurance fund in the case that their money was lost. Moreover, beyond his embezzlement, SBF’s other company had been quietly withdrawing deposits to pay back lenders, supporting company executives’ expensive habits, gambling in international cryptocurrency markets, and contributing millions of dollars to U.S. politicians’ campaigns.