TL;DR
- Once the king of crypto, SBF has been convicted on seven counts of financial fraud and faces up to 115 years in prison.
- Damian Williams, the top federal prosecutor in Manhattan, brought the case, with three former top executives from SBF’s empire participating.
SBF Convicted of Multi-Billion Dollar FTX Fraud
Sam Bankman-Fried was declared guilty of embezzling funds from customers of FTX, marking one of the largest financial frauds.
A jury of twelve members in Manhattan federal court convicted Bankman-Fried on all seven charges he faced following the trial.
During the trial, prosecutors presented evidence that he siphoned off $8 billion from the exchange’s users out of sheer greed.
The verdict was delivered one year after FTX filed for bankruptcy in a rapid collapse that wiped out his fortune.
The jury took just over four hours to reach their verdict!
This conviction marked a significant achievement for the DOJ and Damian Williams, who prioritized combating corruption in financial markets.
“The crypto industry might be new, the players like Sam Bankman-Fried may be new, but this kind of fraud is as old as time, and we have no patience for it.”
Damian Williams
U.S. Marshals escorted Bankman-Fried away, he turned and nodded to his parents, Joseph Bankman and Barbara Fried. Fried returned his look and crossed her arm across her chest.
Prosecutors have scheduled Bankman-Fried for another trial in March on earlier charges of bribing foreign officials, wire fraud, and money laundering.
Bankman Fried Testified in His Defence
Bankman-Fried’s trial was the inaugural one in a series of high-profile cases pursued by Williams against former cryptocurrency executives.
Several cryptocurrency companies faced insolvency the previous year as the values of cryptocurrencies plummeted, concluding a multi-year boom.
Bankman-Fried opted for a calculated risk by taking the stand in his defense, following testimonies against him from three colleagues.
Under rigorous cross-examination by the prosecution, he often evaded direct responses to the most probing inquiries.
Nevertheless, he testified that while acknowledging mistakes in managing FTX, he denied stealing customer funds.
Furthermore, SBF explained that he believed Alameda’s borrowing from FTX was permitted, and he was unaware of the significant debts that were accumulating.
He Believed He Was Above the Rules
The prosecution presented a contrasting perspective. Over 15 days, the jury listened to testimonies.
Caroline Ellison, along with Gary Wang and Nishad Singh, asserted that Bankman-Fried had instructed them to engage in illegal activities.
This included assisting Alameda in siphoning funds from FTX and, moreover, deceiving lenders and investors about the companies’ financial state.
On the other hand, the defense argued that the three individuals falsely implicated Bankman-Fried to secure more lenient penalties.
Prosecutors may request Judge Kaplan to consider their cooperation when determining their sentences.
Bankman-Fried has been in custody since August following Judge Kaplan’s decision to revoke his bail.
Do you think SBF will get the maximum sentence?
Suchet Salvesen
Suchet is a Norwegian economist, entrepreneur, and investor, serving as the CFO and COO of Brainfund. With over a decade of experience in global expansion, venture capital, and emerging technologies, he earned his MBA from the NMBU School of Business & Economics. He held dual bachelor's degrees from the University of South-Eastern Norway. His career spans roles at NextToMe, Get, and Conax before joining Everipedia, now Brainfund, in 2017.
