NEW YORK – A jury on Thursday convicted FTX co-founder Sam Bankman-Fried of fraud, conspiracy and money laundering, the culmination of a monthlong trial that saw the former crypto mogul take the stand in his own defense after his inner circle of friends-turned-deputies provided damning testimony against him.
The decision was reached after a few hours of deliberation by a jury of nine women and three men, who found Bankman-Fried guilty of two counts of wire fraud, four counts of conspiracy to commit fraud and one count of conspiracy to commit money laundering.
The conviction cements Bankman-Fried as one of the largest financial fraudsters in history, whose victims suffered nearly $10 billion in losses after FTX misappropriated customer funds to spend lavishly on luxury real estate, investments and “dark money” political donations, all at his direction, the jury found.
In the five weeks the trial played out on the top floor of the Daniel Patrick Moynihan U.S. Courthouse in Manhattan, the jury heard from Bankman-Fried’s former romantic partner and former CEO of Alameda Research, Caroline Ellison; FTX co-founders Nishad Singh and Gary Wang; and Bankman-Fried’s college roommate, Adam Yedidia. They offered consistent accounts, backed by documentary evidence, implicating Bankman-Fried as the mastermind of a sweeping scheme to steal customer funds and lie to investors.
But the most damaging testimony arguably came from Bankman-Fried himself. The disgraced crypto mogul traded the chance to tell his side of the story one final time for a gutting cross examination by prosecutor Danielle Sassoon. She used Bankman-Fried’s own words, including from a whirlwind set of interviews he gave in the wake of his empire’s collapse, to expose what the prosecution described as a steady stream of lies.
During that questioning, Bankman-Fried claimed more than 140 times not to remember key details or his own statements, a fact that prosecutor Nicolas Roos noted in his closing argument on Wednesday.
“This was a pyramid of deceit built by the defendant on a foundation of lies and false promises, all to get money, and eventually it collapsed, leaving countless victims in its wake,” Roos said.
In prosecutors’ telling, Bankman-Fried presided over a straightforward fraud dressed up as a breakthrough financial innovation. They traced Bankman-Fried’s theft of customer funds to 2021, when he ordered Ellison to spend $2 billion to buy back the FTX stake owned by rival crypto exchange Binance. Ellison responded that the business only had half that amount on hand and would have to borrow the rest from FTX customers, according to her testimony. Bankman-Fried told her to proceed anyway.
“It’s clear as day the defendant knows that they’re stealing and committing fraud. And that’s exactly what they do,” Roos said in his closing argument.
Bankman-Fried tapped customer funds again that fall to fund $3 billion in venture investments, despite Ellison warning that spending could prove ruinous if the crypto market went south.
Bankman-Fried’s defense attorneys tried to present the defendant as a well-meaning if overwhelmed entrepreneur who paid too little attention to mounting risks and trusted too much in his underlings.