Sam Bankman-Fried’s Gambit to Take the Stand Fails, Found Guilty on All Seven Counts
A 12-member jury delivered their verdict against Sam Bankman-Fried only after a four-hour-long deliberation after a month-long trial.
- FTX founder and CEO was found guilty on all seven counts, six for fraud and one for money laundering.
- A 12-member jury delivered their verdict against Bankman-Fried only after a four-hour-long deliberation after a month-long trial.
FTX founder and CEO Sam Bankman-Fried’s fall from grace and of his company’s fall from a $32 billion valuation to bankruptcy precisely a year ago following the ousting of financial discrepancies in and with Fried’s other venture, Alameda Research, has culminated in the executive’s convictions by a jury in the U.S. District Court for the Southern District of New York.
Fried was found guilty on all seven counts, including two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering, conspiracy to commit commodities fraud and conspiracy to commit securities fraud each.
The 12-member jury delivered their verdict only after a four-hour-long deliberation over the billionaire’s role in the misdirected handling of his crypto exchange platform FTX and trading firm Alameda Research.
Over the month-long federal trial, three other FTX and Alameda Research executives, including Bankman-Fried’s former partner and Alameda Research CEO Caroline Ellison, pleaded guilty. The trio even testified against Bankman-Fried. Moreover, the former FTX CEO’s decision to take the stand to testify at his own trial, rather bungled at that, was ripped apart by the U.S. prosecutors.
Moreover, the argument by Bankman-Fried, in his defense, of making “Business decisions made in good faith are not grounds to convict. Poor risk management is not a crime…bad business judgments are not a crime” was hit back at by the prosecutor Danielle Sassoon.
Equating Bankman-Fried’s claim that he committed a mistake and not a crime with that of a person justifying their robbery of a jewelry store by attributing it to a lack of a security guard, Sassoon noted, “He didn’t bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits – billions and billions of dollars – to give himself money, power, influence.”
“He thought the rules did not apply to him. He thought that he could get away with it,” Sassoon added.
Bankman-Fried was found guilty of misappropriating and embezzling FTX customer deposits by using them to “enrich himself; to support the operations of FTX; to fund speculative venture investments; to help fund over a hundred million dollars in campaign contributions to Democrats and Republicans to seek to influence cryptocurrency regulation; and to pay for Alameda’s operating costs.”
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Specifically, Bankman-Fried is convicted of the following:
- Wire Fraud on Customers of FTX
- Conspiracy to Commit Wire Fraud on Customers of FTX
- Wire Fraud on Lenders to Alameda Research
- Conspiracy to Commit Wire Fraud on Lenders to Alameda Research
- Conspiracy to Commit Securities Fraud on Investors in FTX
- Conspiracy to Commit Commodities Fraud on Customers of FTX in Connection with Purchases and Sales of Cryptocurrency and Swaps
- Conspiracy to Commit Money Laundering
Bankman-Fried, son of law professors at Stanford Law School, now faces a maximum of 110 years in prison, 20 years each that the first five counts carry, and five years each for the final two counts he was found guilty of.
That’s not all, though. Bankman-Fried faces five additional counts, including wire fraud, securities fraud, and violation of anti-bribery laws, in a trial scheduled for March 2023. While a convict is typically sentenced within 90 days of the verdict, Bankman-Fried’s sentencing could be carried by Judge Lewis Kaplan on March 28 owing to the second trial.
“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history – a multibillion-dollar scheme designed to make him the King of Crypto – but 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,” said U.S. Attorney Damian Williams. “This case has always been about lying, cheating, and stealing, and we have no patience for it.”
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