Jurors took only a half-day of deliberations today to find former FTX founder Sam Bankman-Fried guilty of seven counts of fraud in a scheme that cost customers an estimated $10 billion to $14 billion. His crypto exchange, FTX, collapsed into bankruptcy last year.
He now faces a March 28 sentencing date that could result in decades of prison time. The 2009 prosecution of Bernard Madoff, whose Ponzi scheme bilked about $20 billion. resulted in a sentence of 150 years in prison.
U.S. Attorney Damian Williams told reporters after the verdict that 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 here’s the thing: The cryptocurrency industry might be new. The players like Sam Bankman-Fried might be new. This kind of fraud, this kind of corruption, is as old as time, and we have no patience for it,” he said.
Bankman-Fried’s attorneys said they were disappointed with the verdict. Bankman-Fried himself took the witness stand for four days, a rare gambit by a defendant. He said that he never intended to commit fraud or cheat customers during his testimony.
“His crimes caught up to him. His crimes have been exposed,” Assistant U.S. Attorney Danielle Sassoon told the jury just before they began deliberations. Sassoon said Bankman-Fried turned his customers’ accounts into his “personal piggy bank,” as up to $14 billion disappeared.
Bankman-Fried, 31, was one of the top players in the emerging industry of cryptocurrency. He lived the part, as he frequently spoke at industry conferences and lived with a group of young executives in their 20s in the Bahamas.
Private jets, Super Bowl tickets, and celebrity hangs were all part of their world, Bankman-Fried was also the No. 2 Democratic party donor for the 2022 elections, donating more than $40 million. Hollywood also pursued him, hoping to get exclusives on his story.
The government relied on the testimony of three former members of Bankman-Fried’s inner circle, including his former girlfriend, Caroline Ellison. They detailed how he used customer money from FTX to prop up his hedge fund, Alameda Research.
FTX cofounder Gary Wang, who was FTX’s chief technology officer, testified that Bankman-Fried directed him to insert code into FTX’s operations so that Alameda Research could make unlimited withdrawals from FTX and have a credit line up to $65 billion. Wang said the money came from customers.
Ellison, Wang and Singh all pleaded guilty to fraud charges and testified against Bankman-Fried in the hopes of leniency at sentencing.
Bankman-Fried was arrested last December and extradited to the United States. He remained free on a $250 million personal recognizance bond with electronic monitoring at the home of his parents in Palo Alto, California. But he was jailed in August when a judge found he was trying to influence the media and others.
Associated Press contributed to this report.