‘Crypto King’ Sam Bankman-Fried guilty of FTX fraud

Sam Bankman-Fried, who once ran one of the world’s biggest cryptocurrency exchanges, has been found guilty of all seven criminal counts against him at the end of a month-long trial in New York. The FTX founder faces a maximum sentence of 115 years in prison.

Bankman-Fried, the 31-year old son of two Stanford legal scholars and graduate of Massachusetts Institute of Technology, was convicted of wire fraud and conspiracy to commit wire fraud against FTX customers and against Alameda Research lenders, conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors, and conspiracy to commit money laundering.

He had pleaded not guilty to the charges, which were all tied to the collapse late last year of FTX and sister hedge fund Alameda.

The monthlong trial was highlighted by testimony from the government’s key witnesses, including Caroline Ellison, Bankman-Fried’s ex-girlfriend and the former head of Alameda, and FTX co-founder Gary Wang, who was Bankman-Fried’s childhood friend from math camp. Both pleaded guilty in December to multiple charges and cooperated as witnesses for the prosecution.

Most of the defense’s case was built on the testimony of Bankman-Fried himself, who told the court that he didn’t commit fraud or steal customer money, but just made some business mistakes.

The central question for jurors to consider was whether Bankman-Fried acted with criminal intent in taking customer funds from FTX and using that money to pay for real estate, venture investments, corporate sponsorships, political donations and to cover losses at Alameda after crypto prices plunged last year.

Assistant U.S. Attorney Nicolas Roos told the court in his closing argument on Wednesday, there was “no serious dispute” that $10 billion in customer money that was sitting in FTX’s crypto exchange went missing. The issue, he said, is whether Bankman-Fried knew that taking the money was wrong.

“The defendant schemed and lied to get money, which he spent,” Roos said.

Bankman-Fried now awaits sentencing. His case has been compared to that of Elizabeth Holmes, the founder of medical device company Theranos, which ceased operations in 2018.

Holmes, 39, was convicted in early 2022 on four counts of defrauding investors in Theranos after testifying in her own defense. She was sentenced to more than 11 years in prison, and began serving her punishment in May at a minimum-security facility in Bryan, Texas.