FTX’s Sam Bankman-Fried Found Guilty in Monumental $8 Billion Fraud Scandal
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News - November 3, 2023

FTX’s Sam Bankman-Fried Found Guilty in Monumental $8 Billion Fraud Scandal

Sam Bankman-Fried has been convicted on all seven criminal counts, and he now potentially faces a maximum prison sentence of 115 years, as determined by the jury.

The 31-year-old individual, Sam Bankman-Fried, who is the son of two Stanford legal scholars and an alumnus of the Massachusetts Institute of Technology, has been found guilty of a range of charges. 

Sam Bank-man Fried’s charges

These charges include wire fraud and conspiracy to commit wire fraud against FTX customers and Alameda Research lenders, as well as conspiracy to commit securities fraud and commodities fraud against FTX investors, in addition to conspiracy to commit money laundering.

Sam Bankman-Fried had initially entered a not-guilty plea to the charges, all of which were linked to the late-year collapse of FTX and its sister hedge fund, Alameda. 

In response to the verdicts, Damian Williams, U.S. attorney for the Southern District of New York, stated during a briefing, “Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history. While the cryptocurrency industry and individuals like Sam Bankman-Fried may be relatively new, corruption of this nature is age-old. This case has always revolved around deception, dishonesty, and misappropriation, and we will not tolerate it.”

Attorney General Merrick Garland stated that Sam Bankman-Fried believed he could evade the law, but today’s verdict proves him wrong. Garland emphasized that this case should serve as a clear message to anyone attempting to conceal their actions behind complex concepts, as the Justice Department will hold them accountable.

The trial, commencing in early October, saw the former close friends and key associates of Bankman-Fried providing testimony that contradicted their former boss and ex-roommate’s sworn statements. Following the jury’s deliberation, they swiftly reached a verdict on Thursday afternoon around 3:15 p.m., pausing briefly for dinner at approximately 6 p.m.

At 7:37 p.m., the attorneys hastily returned to the courtroom, and the clerk promptly announced, “The jury has reached a verdict.” Within a minute, the jury reconvened in the room.

Bankman-Fried awaits sentencing

The defense primarily relied on Bankman-Fried’s testimony, asserting that he hadn’t engaged in fraud or embezzled customer funds but had made business errors. The key question for the jurors to deliberate was whether Bankman-Fried had criminal intent when diverting customer funds from FTX for real estate, investments, sponsorships, political contributions, and to offset Alameda’s losses following the cryptocurrency market downturn last year.

Assistant U.S. Attorney Nicolas Roos, during his closing argument on Wednesday, stressed that there was little dispute regarding the disappearance of $10 billion in customer funds from FTX’s cryptocurrency exchange. 

The central issue, he contended, was whether Bankman-Fried was aware that taking the money was ethically wrong. Bankman-Fried now awaits sentencing, and his case has drawn comparisons to that of Elizabeth Holmes, the founder of Theranos, a medical device company that ceased operations in 2018. 

Holmes, aged 39, was convicted in early 2022 on four counts of defrauding Theranos investors after testifying in her defense. She received a prison sentence of over 11 years and began serving her term in May at a minimum-security facility in Bryan, Texas.

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