After four weeks of brutal testimony detailing his sex life, his alleged financial crimes, and his glory days as a multibillionaire, Sam Bankman-Fried earned a new title on Thursday: convicted fraudster.
A federal jury in Manhattan deliberated for less than a day before finding the former cryptocurrency whiz kid guilty on all seven counts. He faces more than 100 years of possible prison time at his sentencing—which is set to take place in March.
“We respect the jury’s decision, but we are very disappointed with the result,” Bankman-Fried’s attorney, Mark Cohen, said outside the courthouse.
“My client... maintains his innocence and will continue to vigorously fight the charges against him.”
U.S. Attorney Damian Williams said the swift conviction should serve as a warning to financial flim-flam artists.
“While the cryptocurrency industry might be new and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time. This case has always been about lying, cheating, and stealing, and we have no patience for it,” he said in a statement.
“This case is also a warning to every fraudster who thinks they’re untouchable, that their crimes are too complex for us to catch, that they are too powerful to prosecute, or that they are clever enough to talk their way out of it if caught. Those folks should think again, and cut it out. And if they don’t, I promise we’ll have enough handcuffs for all of them.”
The verdict capped a precipitous fall from grace for Bankman-Fried, who just two years ago was named by Forbes one of the youngest newcomers ever to its list of the country’s richest people, with a net worth of $22.5 billion. He mingled with Bill Clinton, Tony Blair, and Tom Brady, courted U.S. senators from both parties, and splashed out on luxury real estate.
Bankman-Fried, 31, was arrested in the Bahamas in December 2022 following the sudden collapse of his crypto exchange, FTX, and his crypto trading firm, Alameda Research. Federal prosecutors in the U.S. unsealed an eight-count indictment soon after, including charges of wire fraud and conspiracy to commit money laundering.
Prosecutors later added other counts, such as attempting to bribe a foreign government. Because of legal technicalities related to his extradition, five of the charges were eventually severed (he could be tried on those next year).
The government’s case centered on FTX’s decision to loan billions of dollars of customer deposits to Alameda, which then used the money to make risky investments and pay off its debts. In the fall of 2022, amid turbulence in the crypto markets, customers sought to withdraw their funds en masse. But the money was no longer there.
Four of Bankman-Fried’s former executives—Nishad Singh, Gary Wang, Ryan Salame, and his ex-girlfriend Caroline Ellison—later pleaded guilty to federal charges. Singh, Wang, and Ellison all testified during his trial.
“He directed me to commit these crimes,” said Ellison, who was Alameda’s CEO. She told the jury she created inaccurate balance sheets, which she shared with Bankman-Fried, in an effort to deceive investors about the amount of risk they were taking on.
When Alameda collapsed, Ellison held an all-hands meeting with her staffers. Asked who was responsible for the mess, she giggled uncomfortably and said, “Sam, I guess.”
Singh testified that the group had engaged in “heinously criminal” activity.
According to Ellison, the executives exhibited a total disregard for global regulation. In one case, she said, they sent $150 million to Chinese officials to gain access to frozen accounts. They later referred to the debacle as “the thing.”
Ellison said they had considered crackpot alternatives, like moving money to accounts in the name of Thai sex workers. Bribery, she explained, was their backup plan.
Even before the trial, Judge Lewis Kaplan expressed frustration with Bankman-Fried, who was originally allowed to remain under home confinement at his parents’ California house. Kaplan warned Bankman-Fried to abide by the court’s instructions after he used a virtual private network—or VPN—in February, supposedly to watch the Super Bowl. Prosecutors argued that he may have been trying to use the internet without oversight.
Once the trial started, it was Bankman-Fried’s attorneys who appeared to irk the judge. He repeatedly admonished them for their slow and repetitive approach to cross-examination. By the time the defense started presenting its case on Oct. 26, Bankman-Fried seemed to be facing an uphill battle, and in a highly risky move, he decided to testify himself.
Bankman-Fried seemed to struggle. During cross-examination, he at times came off evasive, frequently telling Assistant U.S. Attorney Danielle Sassoon that he could not recall making statements to the press about the company’s operations and approach to risk management. Time and again, she would then call up exhibits showing Bankman-Fried saying exactly what she’d described.
Sassoon also challenged Bankman-Fried’s assertion that he knew little about Alameda’s massive debts. For example, she probed one instance from the summer of 2022, when it appeared that Alameda faced a massive financial hole; Bankman-Fried said he didn’t investigate the matter in depth. (The issue turned out to be partially attributable to a software bug.)
“It’s your testimony that as CEO, some unknown people spent $8 billion without your knowledge?” Sassoon questioned. She asked why he hadn’t demanded that his deputies fill him in.
“I was told they were busy and I should stop asking questions,” he said.
Bankman-Fried admitted to the jury that he had made “significant oversights” and that he had deep “regret” for not better safeguarding his customers’ money. But he insisted that his behavior wasn’t criminal.
Evidently, the jury didn’t buy it.