FTX founder Sam Bankman-Fried convicted of defrauding cryptocurrency customers
NEW YORK — FTX founder Sam Bankman-Fried’s spectacular rise and fall in the cryptocurrency industry — a journey that included his testimony before Congress, a Super Bowl advertisement and dreams of a future run for president — hit rock bottom Thursday when a New York jury convicted him of fraud in a scheme that cheated customers and investors of at least $10 billion.
After the monthlong trial, jurors rejected Bankman-Fried’s claim during four days on the witness stand in Manhattan federal court that he never committed fraud or meant to cheat customers before FTX, once the world’s second-largest crypto exchange, collapsed into bankruptcy a year ago.
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“His crimes caught up to him. His crimes have been exposed,” Assistant U.S. Attorney Danielle Sassoon told the jury of the onetime billionaire just before they were read the law by Judge Lewis A. Kaplan and began deliberations. Sassoon said Bankman-Fried turned his customers’ accounts into his “personal piggy bank” as up to $14 billion disappeared.
She urged jurors to reject Bankman-Fried’s insistence when he testified over three days that he never committed fraud or plotted to steal from customers, investors and lenders and didn’t realize his companies were at least $10 billion in debt until October 2022.
Bankman-Fried was required to stand and face the jury as guilty verdicts on all seven counts were read. He kept his hands clasped tightly in front of him. When he sat down after the reading, he kept his head tilted down for several minutes.
After the judge set a sentencing date of March 28, Bankman-Fried’s parents moved to the front row behind him. His father put his arm around his wife. As Bankman-Fried was led out of the courtroom, he looked back and nodded toward his mother, who nodded back and then became emotional, wiping her hand across her face after he left the room.
U.S. Attorney Damian Williams told reporters after the verdict that Bankman-Fried “perpetrated one of the biggest financial frauds in American history, a multibillion dollar scheme designed to make him the king of crypto.”
“But here’s the thing: The cryptocurrency industry might be new. The players like Sam Bankman-Fried might 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 attorney, Mark Cohen, said in a statement they “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,” Cohen said.
The trial attracted intense interest with its focus on a fraud on a scale not seen since the 2009 prosecution of Bernard Madoff, whose Ponzi scheme over decades cheated thousands of investors out of about $20 billion. Madoff pleaded guilty, was sentenced to 150 years in prison, where he died in 2021.
