FTX founder Sam Bankman-Fried found guilty on all counts, faces over 100 years in prison
After 15 days of testimony and around four and a half hours of deliberation, a jury in a lower Manhattan court found FTX founder Sam Bankman-Fried, also known as SBF, guilty on all seven counts related to fraud, conspiracy, and money laundering. The sentencing for these charges, which could carry up to 115 years in prison, is scheduled for March 28, 2024. SBF plans to file an appeal against the verdict.
After spending a little over four hours, the jury came to the conclusion that the 31-year-old former FTX CEO had stolen $8 billion in customer funds from the bankrupt FTX crypto exchange. Allegedly, these funds were diverted to support high-risk investments, political contributions, and luxury real estate.
Throughout the trial, three of SBF’s former top associates, including his ex-girlfriend Caroline Ellison, testified that he orchestrated the elaborate scheme. His defense during the trial lacked conviction, notably when he took the stand and claimed he made mistakes but denied knowingly stealing from customers, frequently citing memory lapses during cross-examination.
After the verdicts were read, Damian Williams, U.S. attorney for the Southern District of New York, said in a briefing:
“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history. While the cryptocurrency industry might be new and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time. This case has always been about lying, cheating, and stealing, and we have no patience for it.”
Bankman-Fried first came into the spotlight in 2020 after he donated a whopping $5.2 million to Joe Biden’s campaign, making him the second-biggest donor. The stark turn of events places Bankman-Fried in a drastically different position than just three years ago when he was a billionaire rubbing shoulders with celebrities like Tom Brady in the Bahamas.
FTX, founded by Bankman-Fried in 2019, gained significant attention during the pandemic’s crypto fervor. The company heavily marketed its services, securing naming rights to FTX Arena where the Miami Heat played, and recruiting A-listers like Larry David and Tom Brady to endorse its crypto trading platform.
However, as the crypto market plummeted in 2022, FTX’s financial irregularities came to light, ultimately leading to its collapse. The person tasked with rectifying FTX’s affairs commented that the company exhibited an unprecedented failure of corporate controls and a lack of reliable financial information.
SBF was not just involved in the business realm but was also an active figure in Washington, advocating for regulatory oversight in the crypto industry and actively contributing to political causes.
FTX, headquartered in the Bahamas, offers derivative products such as futures, options, and spot trading. Once an obscure startup, FTX rapidly rose to prominence, rivaling major platforms like Coinbase and Binance within the crypto space.
On November 11, 2022, FTX filed for Chapter 11 bankruptcy a day after SBF resigned as the company’s CEO.