Sam Bankman-Fried, FTX founder, found guilty of fraud, money laundering

Sam Bankman-Fried, former chief executive officer (CEO) of FTX, on Thursday, was found guilty of fraud and money laundering at the end of a month-long trial in New York.

The 31-year-old crypto expert was convicted on a seven-count charge by a 12-member jury in Manhattan federal court, despite pleading not guilty to two counts of fraud and five counts of conspiracy.

The jury reached the verdict after over five hours of deliberations.

The prosecutors argued that he looted $8 billion from the exchange’s users out of sheer greed, but Bankman-Fried pleaded not guilty to all the charges, insisting that, while he made mistakes, he had “acted in good faith”.

During the trial, the prosecutors presented evidence that Bankman-Fried’s crypto trading firm — Alameda Research — received deposits on behalf of FTX customers from the early days of the exchange when traditional banks were unwilling to let it open an account.

According to the lawmakers, instead of safeguarding those funds (as Bankman-Fried repeatedly pledged to do in public) he used the money to repay Alameda lenders, buy property, and make investments and political donations.

Five of the charges The ex-FTX CEO was found guilty of were said to carry a maximum prison term of 20 years, with a five-year maximum on the other two charges.

Speaking after the verdict, Damian Williams, a federal prosecutor in Manhattan who specialises in rooting out corruption in financial markets, said “it was a victory for the US department of justice and also one of his top priorities”.

“The crypto industry might be new, the players like Sam Bankman-Fried may be new, but this kind of fraud is as old as time and we have no patience for it,” Williams said.

“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.

“This case has always been about lying, cheating, and stealing, and we have no patience for it.”

On his part, Mark Cohen, Bankman-Fried’s lawyer said, “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,” he added.

Last year, Bankman-Fried was arrested by Bahamian authorities due to criminal charges filed by the US government.

He now faces decades in prison as his sentencing has been set for March 28, 2024.