FTX crypto king Sam Bankman-Fried, guilty of seven counts of fraud, faces a possible long prison term

Jurors needed just half a day of deliberations today to find former FTX founder Sam Bankman-Fried guilty of seven counts of fraud, in a scam estimated to have cost clients between $10 billion and $14 billion. Its crypto exchange FTX went bankrupt last year.

He now faces sentencing on March 28, which could lead to decades in prison. The prosecution of Bernard Madoff in 2009, whose Ponzi scheme generated about $20 billion. resulted in 150 years in prison.

U.S. Attorney Damian Williams told reporters after the verdict that Bankman-Fried “perpetrated one of the largest financial frauds in American history, a multibillion-dollar scheme designed to make him the king of cryptocurrencies .”

“But the point is: the cryptocurrency industry may be new. Players like Sam Bankman-Fried could be new. This kind of fraud, this kind of corruption is as old as time and we have no patience for it,” he said.

Bankman-Fried’s lawyers said they were disappointed by the verdict. Bankman-Fried himself took the witness stand for four days, a rare undertaking by a defendant. He said he never intended to commit fraud or defraud clients when he testified.

“His crimes caught up with him. His crimes have been exposed,” Assistant U.S. Attorney Danielle Sassoon told jurors just before deliberations began. Sassoon said Bankman-Fried turned his clients’ accounts into his “personal piggy bank” while up to $14 billion disappeared.

Bankman-Fried, 31, was one of the top players in the emerging cryptocurrency industry. He lived out his role by speaking regularly at industry conferences and living in the Bahamas with a group of young executives in their 20s.

Private jets, Super Bowl tickets and celebrities were part of her world. Bankman-Fried was also the Democratic Party’s second largest donor for the 2022 election, donating more than $40 million. Hollywood has also been watching him, hoping to get exclusive information about his story.

The government relied on the testimony of three former members of Bankman-Fried’s inner circle, including his former girlfriend Caroline Ellison. They explained how he used FTX client funds to keep his hedge fund Alameda Research going.

Gary Wang, co-founder of FTX and chief technology officer of FTX, testified that Bankman-Fried instructed him to insert code into FTX’s operations so that Alameda Research could make unlimited withdrawals from FTX and a line of credit of up to $65 billion. could receive. Wang said the money comes from customers.

Ellison, Wang and Singh all pleaded guilty to fraud charges and testified against Bankman-Fried in hopes of receiving leniency at sentencing.

Bankman-Fried was arrested last December and extradited to the United States. He remained free on a $250 million personal recognizance bond with electronic monitoring at his parents’ home in Palo Alto, California. But he was jailed in August when a judge found he was trying to influence the media and others.

The Associated Press contributed to this report.