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 for stealing at least $10 billion from customers and investors.
After the monthlong trial, jurors rejected Bankman-Fried’s claim during testimony 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.
“Mr. Bankman-Fried. Please rise and face the jury,” Judge Lewis A. Kaplan commanded just before a jury forewoman responded “guilty” seven times to two counts of wire fraud, two counts of wire fraud conspiracy and three other conspiracy charges, which carry potential penalties adding up to 110 years in prison. Bankman-Fried is likely to face far less than the maximum at a sentencing set for March 28.
As the verdict was read, Bankman-Fried seemed stunned, appearing stone-faced, his hands clasped before him, as his lawyers remained sitting beside him. When he sat down, he looked down for several minutes.
His lawyer, Mark Cohen, later read a statement outside court to say 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.
U.S. Attorney Damian Williams, who sat in the front row of the spectator section during the verdict, stood before cameras outside the courthouse and said 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.
He said the case should serve as a warning to every other fraudster who “thinks they’re untouchable, that their crimes are too complex,” that they are too powerful to prosecute or can talk their way out of their crimes because “I promise we’ll have enough handcuffs for all of them.”
The jury rejected Bankman-Fried’s insistence during three days of testimony 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.
After the jury left the room, Bankman-Fried’s parents, both Stanford University law professors, 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 over her face after he left the room.
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 and was sentenced to 150 years in prison, where he died in 2021.