Sam Bankman-Fried, the one-time cryptocurrency golden boy accused by US prosecutors of stealing billions of dollars of his customers’ money, was on Thursday found guilty on all counts and faces up to 110 years behind bars.
The jury reached its decision in just five hours after a trial in New York lasting five weeks. Sentencing for the man widely known as “SBF” is to take place on March 28 next year.
US Attorney Damian Williams said in a statement after the verdict that Bankman-Fried had “perpetrated one of the biggest financial frauds in American history, a multibillion-dollar scheme designed to make him the king of crypto.”
Photo: AFP
“The cryptocurrency industry might be new, players like SBF might be new, but this kind of fraud, this kind of corruption is as old as time and we have no patience for it,” he said.
Mark Cohen, Bankman-Fried’s lawyer, said they were “very disappointed with the result.”
“Mr Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him,” Cohen added.
In November last year, FTX, a small start-up Bankman-Fried cofounded in 2019, was unable to cope with massive withdrawal requests from customers, who were panicked to learn that some of the funds stored at the company had been committed to risky operations at Bankman-Fried’s hedge fund, Alameda Research.
Some of his closest associates testified during the trial that he was key to all the decisions that saw US$8 billion vanish from his FTX trading platform.
In closing arguments, prosecutors portrayed the defendant as an extremely smart man consumed by greed who knew what he was doing when FTX funds were secretly funneled to Alameda.
The star witness was Caroline Ellison, former Alameda chief executive and Bankman-Fried’s on-again, off-again girlfriend.
She told the jury they had stolen about “US$14 billion” from FTX clients and that Bankman-Fried, as owner of Alameda, “directed me to commit those crimes.”
That money was used to finance venture capital deals and political contributions, as well as swanky real estate in the Bahamas.
It also went toward paying tens of millions of dollars to celebrities, including Tom Brady and Gisele Bundchen, to gain their endorsement of FTX, as well as buying the naming rights for the Miami Heat’s home arena.
Prosecutors said that just over US$8 billion belonging to customers had vanished into bad investments at Alameda.
Bankman-Fried admitted during his trial he had made “mistakes,” but denied that he had ever tried to defraud anyone.
Prosecutor Nicholas Roos told the jury it had to decide whether “the defendant knew taking the money was wrong.”
“He knew it was wrong. He did it anyway [and] thought because he was smart he could get away with it,” he said.
Underlining the high level of interest in the case, US Attorney General Merrick Garland issued a statement after the verdict thanking prosecutors and the FBI for their “outstanding work in bringing Mr Bankman-Fried to justice.”
“This case should send a clear message to anyone who tries to hide their crimes behind a shiny new thing they claim no one else is smart enough to understand: the Justice Department will hold you accountable,” the statement said.
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