A 12-person jury found Sam Bankman-Fried guilty of seven counts on Thursday, the culmination of a year-long criminal proceeding following the November 2022 collapse of the crypto exchange FTX.
In an industry known for fraud and excess, Bankman-Fried charted a spectacular path, including a meteoric rise that saw FTX valued at $32 billion after just a few years of operations. After a run on customer deposits last November revealed a massive hole at the center of its business, FTX declared bankruptcy, with Bankman-Fried arrested a few weeks later.
The Department of Justice charged him with seven criminal counts, including wire fraud, securities fraud, and money laundering, alleging that he misappropriated around $8 billion of customer assets for his own purposes, including luxury real estate in the company’s headquarters of the Bahamas, venture investments, and risky trades.
After a month-long trial, the jury needed less than five hours to decide he was guilty of all charges. Such speedy verdicts in high-stakes white-collar cases aren’t the norm.
“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history—a multibillion-dollar scheme designed to make him the king of crypto,” U.S. Attorney Damian Williams said at a Thursday night press conference. “But here’s the thing: The cryptocurrency industry might be new, the players like Sam Bankman-Fried might be new, but this kind of fraud, this kind of corruption, is as old as time. And we have no patience for it.”
The crypto king
During crypto’s bull run in 2021 and 2022, Bankman-Fried was everywhere. From billboards to Super Bowl commercials, he assured would-be FTX users that the exchange was a safe place to trade digital assets like Bitcoin.
The stunning collapse of FTX turned Bankman-Fried’s criminal proceedings into a circus. Even his bail conditions proved dramatic, with Judge Lewis Kaplan remanding the crypto founder to a Brooklyn detention center after he leaked private writings from Caroline Ellison—his one-time girlfriend and the CEO of FTX’s trading firm, Alameda Research—to the New York Times.
The trial started in early October, with DOJ prosecutors trotting out a series of witnesses, including members of his inner circle who testified he had directed them to steal billions of dollars in customer assets for their own purposes.
After the prosecution rested its case, Bankman-Fried made the unusual decision to take the stand—a right that defendants typically waive to avoid self-incrimination. During three days of cross-examination, including one without the jury present, prosecutors poked holes in Bankman-Fried’s story that he was acting in good faith, with the crypto founder frequently pleading ignorance of what was happening at his own company.
‘Maintains his innocence’
After just over four hours of deliberation, the jury instructed Kaplan on Friday that it had reached its verdict: Bankman-Fried was guilty. He could face decades behind bars.
Sentencing is set for March 28. Bankman-Fried also faces a second criminal trial scheduled for March 2024 for additional charges that were severed due to complications over his extradition agreement with the Bahamas. One of the other counts includes alleged bribery of a Chinese official while Alameda was based in Hong Kong.
Bankman-Fried also has the opportunity to appeal.
Mark Cohen, an attorney for Bankman-Fried, issued the following statement in the wake of the decision: “We respect the jury’s decision. But we are very disappointed with the result. Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him.”