Former FTX cryptocurrency exchange head, Sam Bankman-Fried, has been found guilty of seven criminal charges, including securities fraud, wire fraud, and money laundering. This marks a significant downfall for the once-prominent figure in finance, who is often referred to as a “math nerd.”
Bankman-Fried, who now faces the possibility of a lengthy prison sentence, plans to appeal the verdict, according to his lawyer, Mark Cohen.
During a month-long trial, prosecutors presented evidence suggesting that Bankman-Fried orchestrated a large-scale financial fraud scheme. They alleged that he secretly redirected billions of dollars from FTX customer assets to his private trading firm, Alameda Research. The U.S. government claimed he used these funds for personal purposes, including buying luxury real estate, making political donations, and risky investments.
Damian Williams, the U.S. attorney for the Southern District of New York, stated, “Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history.” He emphasized that this case revolved around “lying, cheating, and stealing.”
This conviction signifies a dramatic shift in Bankman-Fried’s life. Just a year ago, he was living lavishly in a $35 million penthouse while leading a cryptocurrency empire valued in the tens of billions. He gained celebrity status in the crypto industry during the peak of cryptocurrency popularity, mingling with figures like Tom Brady.
However, his fortunes took a turn for the worse when concerns were raised about Alameda’s financial stability. This prompted a rush of FTX customers to withdraw their funds, effectively causing a crypto bank run. Subsequently, FTX and Alameda Research filed for bankruptcy, and Bankman-Fried was arrested in The Bahamas.
Several of Bankman-Fried’s former associates, including Caroline Ellison and Gary Wang, who co-founded Alameda Research and FTX, pleaded guilty to separate charges and cooperated with federal prosecutors during the trial. Their testimonies were instrumental in highlighting Bankman-Fried’s involvement in criminal activities.
In a last-ditch effort to avoid prison, Bankman-Fried testified in his own defense, but his performance under cross-examination by prosecutor Danielle Sassoon was unconvincing. His public statements, which downplayed the financial troubles of FTX, contradicted the prosecution’s claims.
Ultimately, the jury sided with the prosecution’s narrative, and Bankman-Fried now faces the possibility of life in prison. Judge Lewis Kaplan is set to deliver his sentence on March 28, 2024.