A federal jury has found Sam Bankman-Fried, the founder of FTX, guilty on all seven counts of fraud and conspiracy he was charged with in relation to the downfall of his cryptocurrency exchange. According to The New York Times, he faces a maximum sentence of 110 years in federal prison. Bankman-Fried was arrested in the Bahamas back in December 2022 after the Department of Justice took a close look at his role in the rapid collapse of FTX. The agency examined whether he transferred hundreds of millions of dollars — the company claimed it was hacked after around $600 million disappeared from its funds — when the exchange filed for bankruptcy. It also investigated whether FTX broke the law when it moved funds to sister company Alameda Research.
During Bankman-Fried’s trial that took place over the past month, prosecutors argued that he used FTX’s funds to keep Alameda Research running. The fallen entrepreneur also founded the cryptocurrency hedge fund, which was ran by his girlfriend Caroline Ellison, who was aware that he used FTX customers’ money to help Alameda meet its liabilities. Bankman-Fried previously denied that he deliberately misused FTX’s funds.
The Times says his lawyers tried to portray him as a math nerd who had to grapple with “forces largely outside of his control,” but the jury clearly disagreed after the prosecution called Ellison and three of Bankman-Fried’s former top advisers to the witness stand. Ellison and all of those advisers had pleaded guilty, with the Alameda Research chief admitting that she committed fraud at Bankman-Fried’s direction. The FTX founder himself took the stand and said that he “deeply regret not taking a deeper look into” the $8 billion his hedge fund had borrowed from the cryptocurrency exchange.
Bankman-Fried was charged with wire fraud on FTX customers, wire fraud on Alameda Research lenders, conspiracy to commit wire fraud on both, conspiracy to commit securities and commodities fraud on FTX customers, as well as conspiracy to commit money laundering. He is scheduled to be sentenced on March 28, 2024 by US District Judge Lewis A. Kaplan, who also presided over his trial.
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