FTX founder Sam Bankman-Fried was found guilty on Thursday of defrauding customers of his now-bankrupt cryptocurrency exchange in one of the biggest financial frauds on record, a verdict that cemented the former billionaire's fall from grace.
A 12-member jury in a Manhattan federal court convicted him on all seven counts he faced after a month-long trial in which prosecutors made the case that he stole $8 billion from the exchange's customers out of sheer greed.
The verdict came just shy of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated $26 billion personal fortune.
The jury reached the verdict after just over four hours of deliberations.
Bankman-Fried, 31, stood and clasped his hands together as the verdict was read.
He had pleaded not guilty to two counts of fraud and five counts of conspiracy.
The conviction represented a victory for the US Justice Department and Damian Williams, the top federal prosecutor in Manhattan, who made rooting out corruption in financial markets one of his top priorities.
Bankman-Fried, a Massachusetts Institute of Technology graduate whose parents are Stanford University law professors, could face decades in prison when his sentence is determined by US District Judge Lewis Kaplan at a later date. His defence lawyers are expected to appeal the verdict.
Once the darling of the cryptocurrency world, Bankman-Fried – who was known for his mop of unkempt curly hair and for wearing shorts and T-shirts rather than business attire – instead joins the likes of admitted Ponzi schemer Bernie Madoff, “Wolf of Wall Street” fraudster Jordan Belfort and insider trader Ivan Boesky as notable people convicted of major US financial crimes.
Bankman-Fried took the calculated risk of giving evidence in his own defence over three days near the close of trial after three former members of his inner circle testified against him.
He faced aggressive cross-examination by the prosecution, often avoiding direct answers to the most probing questions.
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Former FTX chief executive Sam Bankman-Fried arrives on the day of his hearing at Manhattan federal court in New York. Reuters -
Mr Bankman-Fried faces fraud charges over the collapse of the FTX cryptocurrency exchange. AP -
Mr Bankman-Fried pleaded not guilty to charges that he cheated investors and looted customer deposits on his cryptocurrency trading platform. EPA -
Mr Bankman-Fried is facing federal charges that he illegally used money from investors for personal gain. Reuters -
The FTX Group has installed a new chief executive as Mr Bankman-Fried deals with his legal challenges. Reuters -
Mr Bankman-Fried was extradited to the US from the Bahamas in December. AP -
The FTX Group has filed for bankruptcy and has begun an 'orderly process to review and monetise assets for the benefit of all global stakeholders'. AFP -
Mr Bankman-Fried was arrested on December 13, 2022, in the Bahamas after being served with several US criminal charges. AFP -
Mr Bankman-Fried lost much of his wealth in the FTX collapse. AP -
The US accuses Mr Bankman-Fried of committing one of the biggest financial frauds in history. Reuters -
Mr Bankman-Fried, seen here in February 2021, has testified on Capitol Hill about cryptocurrency policy. AFP
He told the court that while he made mistakes running FTX, such as not formulating a risk-management team, he did not steal customer funds.
Bankman-Fried said he thought Alameda's borrowing from FTX was allowed and did not realise how large its debts had grown until shortly before both companies collapsed.
“We thought that we might be able to build the best product on the market,” he said. “It turned out basically the opposite of that.”
The jury heard 15 days of evidence. Former Alameda chief executive Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, who gave evidence on behalf of the prosecution after entering guilty pleas, said he directed them to commit crimes, including helping Alameda loot FTX and lying to lenders and investors about the companies' finances.
Bankman-Fried has been jailed since August after Justice Kaplan revoked his bail, having concluded he had probably tampered with witnesses.
