The founder of FTX, Sam Bankman-Fried, has been found guilty of deceiving customers in the cryptocurrency industry.

The founder of FTX, Sam Bankman-Fried, experienced a dramatic journey in the cryptocurrency industry. This included testifying before Congress, advertising during the Super Bowl, and even having aspirations to run for president in the future. However, his downfall came on Thursday when a New York jury found him guilty of fraud for embezzling over $10 billion from his customers and investors.

Following a trial that lasted a month, the jurors in Manhattan federal court rejected Bankman-Fried’s statement that he did not commit fraud or intend to deceive customers before FTX, which was previously the second-largest cryptocurrency exchange in the world, went bankrupt a year ago.

“Judge Lewis A. Kaplan instructed Mr. Bankman-Fried to stand and face the jury as the jury forewoman declared him “guilty” seven times for two counts of wire fraud, two counts of wire fraud conspiracy, and three other conspiracy charges. These charges could result in a maximum sentence of 110 years in prison. However, Bankman-Fried is expected to receive a lesser sentence at his March 28th sentencing.”

When the decision was announced, Bankman-Fried appeared shocked and kept a serious expression, with his hands folded in front of him. His attorneys stayed seated next to him. After sitting down, he gazed downward for a few minutes.

Mark Cohen, the lawyer, later expressed his disappointment with the outcome of the trial stating, “While we respect the jury’s decision, we are very disappointed with the result.”

Cohen stated that Mr. Bankman Fried maintains his innocence and will persistently defend himself against the accusations.

Damian Williams, the U.S. Attorney who was seated in the front row of the spectator area during the trial, addressed reporters outside the courthouse and accused Bankman-Fried of committing a massive financial fraud. Williams stated that the scheme, worth billions of dollars, was orchestrated by Bankman-Fried in an attempt to become the leader of the cryptocurrency industry.

“However, the fact remains that while the cryptocurrency industry and its participants, such as Sam Bankman-Fried, may be relatively new, fraud and corruption have been around since ancient times. As a society, we will not tolerate such wrongdoing.”

The individual stated that this case should act as a cautionary tale to any other deceitful individuals who believe they are invincible and that their offenses are too intricate. They may also believe they are too influential to face prosecution or can talk their way out of their wrongdoings, but the speaker assures that there will be plenty of handcuffs for all of them.

During three days of testimony, Bankman-Fried’s claims that he had not engaged in fraudulent activities or conspired to defraud customers, investors, and lenders were rejected by the jury. Additionally, he stated that he was not aware of his companies’ debt of at least $10 billion until October 2022.

Following the departure of the jury, Bankman-Fried’s parents, who are both law professors at Stanford University, took their seats in the front row behind him. His father comfortingly placed his arm around his wife as Bankman-Fried was escorted out of the courtroom. He glanced back and gave a nod to his mother, who reciprocated before becoming visibly emotional and wiping her face with her hand once he had left the room.

The trial garnered significant attention due to its examination of a large-scale fraud, comparable to the 2009 case against Bernard Madoff. Known for his Ponzi scheme that spanned several decades and defrauded thousands of investors of approximately $20 billion, Madoff pleaded guilty and received a 150-year prison sentence. He passed away in 2021 while in prison.

The legal proceedings against 31-year-old Bankman-Fried drew attention to the burgeoning world of cryptocurrency and a cohort of young leaders in their twenties who resided in a lavish $30 million apartment in the Bahamas, all while aspiring to dominate the emerging financial landscape.

The prosecutors ensured that the jurors were aware that the defendant they saw in the courtroom, who had short hair and was wearing a suit, was not the same man with his trademark appearance of messy hair and shorts. This appearance became known after he began his cryptocurrency hedge fund, Alameda Research, in 2017 and his cryptocurrency exchange, FTX, two years later.

Pictures were presented to the jury of Bankman-Fried sleeping on a private jet, sitting with a deck of cards, and socializing at the Super Bowl with well-known figures such as singer Katy Perry. Assistant U.S. Attorney Nicolas Roos referred to Bankman-Fried as someone who enjoyed “chasing after celebrities.”

During the final statement, Cohen claimed that the prosecution was attempting to portray Sam as a villain or a monster.

“I find it incorrect and unjust, and I have confidence that you’ve recognized it to be completely untrue,” he stated. “According to the government, Sam was deemed fraudulent in all his actions and words.”

The government heavily depended on the statements of three ex-associates of Bankman-Fried, his high-ranking staff members such as his ex-partner, Caroline Ellison, to clarify how Bankman-Fried utilized Alameda Research to transfer billions of dollars from FTX customer accounts.

Prosecutors claim that using those funds, the Massachusetts Institute of Technology alumnus was able to increase their influence and authority through various means such as investments, donations, large sums of money in political contributions, giving testimony to Congress, and a publicity drive that involved enlisting the support of famous figures such as comedian Larry David and NFL player Tom Brady.

Ellison, who is 28 years old, stated in her testimony that Bankman-Fried instructed her, while she was the CEO of Alameda Research, to engage in fraudulent activities in order to achieve his goals of leading large companies, wielding financial influence, and potentially running for U.S. president in the future. She also mentioned that he believed he had a 5% chance of becoming president.

Ellison became emotional as she recounted the downfall of her cryptocurrency empire in November. She shared that the discovery of fraudulent activities that led customers to demand refunds was a relief for her as she no longer had to continue lying.

During his testimony, FTX co-founder Gary Wang, who previously served as the company’s chief technology officer, stated that Bankman-Fried instructed him to implement a code in FTX’s operations that would allow Alameda Research to make unlimited withdrawals and have a credit line of up to $65 billion. Wang clarified that this money was sourced from customers.

FTX’s former head engineer, Nishad Singh, stated that he was taken aback and appalled by the outcome of the actions of someone he used to admire when he witnessed the full extent of the fraudulent activities. He also revealed that the company’s downfall in November caused him to have suicidal thoughts.

Ellison, Wang, and Singh admitted to committing fraud and provided testimony against Bankman-Fried in hopes of receiving a lighter sentence.

In December, Bankman-Fried was detained in the Bahamas and brought to the US. He was released on a $250 million bond with electronic surveillance and was mandated to stay at his parents’ residence in Palo Alto, California.

His interactions, which involved numerous conversations with reporters and popular online personalities, as well as written communication through emails and texts, ultimately led to his arrest after the judge determined that he was attempting to sway potential witnesses in the trial and subsequently ordered him to be detained in August.

In court, the prosecution presented Bankman-Fried’s public remarks, online posts, and Congressional testimony as evidence against him. These sources revealed that the entrepreneur had consistently assured customers that their deposits were protected and reliable, including a tweet on November 7th stating “FTX is stable. Assets are secure.” This tweet was deleted the following day as customers attempted to withdraw their funds in a frenzy. Four days later, FTX declared bankruptcy.

During his concluding statement, Roos ridiculed Bankman-Fried’s testimony, implying that the defendant’s responses to his lawyer’s questions were practiced and polished.

During cross-examination, the prosecutor noted a significant change in the defendant’s demeanor. They stated that he suddenly seemed unable to recall any details about his company or previous statements, which was unsettling to witness. While he did not have any memory lapses during his initial testimony, he reportedly experienced over 140 instances of it during cross-examination.

Former prosecutors from the federal level stated that the swift decision, reached after only twelve hours of discussion, demonstrated the effectiveness of the government’s handling of the trial.

Joshua A. Naftalis, a former prosecutor in Manhattan and current partner at Pallas Partners LLP, stated that the government’s handling of the case was in line with their expectations. He described the fraud as extensive, but reiterated that it did not necessarily have to be complex. Naftalis believes the jury comprehended this argument.


Ken Sweet, a reporter from the Associated Press, provided contributions from Palm Springs, California.