Bankman-Fried’s lawyer suggested his client would appeal the conviction. “We respect the jury’s decision. But we are very disappointed with the outcome,” defense attorney Mark Cohen said in a statement. “Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him.”
Bankman-Fried is accused of being one of the largest financial fraudsters in history, whose victims suffered nearly $10 billion in losses after FTX misappropriated its clients’ funds and spent them lavishly on luxury real estate, investments and political donations of “dark money”, all for his benefit. direction, the jury concluded.
“The cryptocurrency industry may be new; players like Sam Bankman-Fried might be new. But this kind of fraud, this kind of corruption, is as old as time, and we have no patience for it,” said Manhattan U.S. Attorney Damian Williams.
Bankman-Fried’s parents, Stanford professors Joseph Bankman and Barbara Fried — who became courtroom fixtures seated behind their son throughout the trial — embraced each other moments before the verdict was announced. The defendant stood frozen, facing the jury, while the foreman announced the findings on each count. Fried appeared to hold back tears, then covered his ears with his fingers as U.S. District Judge Lewis A. Kaplan praised the jurors for their work.
Before leaving the courtroom, Bankman-Fried turned and gave his parents a simple nod and a gentle smile.
During the five weeks that the trial took place 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; Nishad Singh and Gary Wang, co-founders of FTX; and Bankman-Fried’s college roommate, Adam Yedidia. They presented consistent accounts, supported by documentary evidence, implicating Bankman-Fried as the mastermind of a vast scheme to steal client funds and lie to investors.
But perhaps the most damaging testimony is that of Bankman-Fried himself. The disgraced crypto mogul traded the chance to tell his side of the story one last time for a grueling cross-examination by prosecutor Danielle Sassoon. She used Bankman-Fried’s own words, including from a series of lightning interviews he gave following the collapse of his empire, to denounce what the prosecution described as a constant flow of lies.
During that interrogation, Bankman-Fried claimed more than 140 times that he did not remember key details or his own statements, a fact that prosecutor Nicolas Roos highlighted in his closing argument Wednesday.
“This was a pyramid of deception built by the accused on a foundation of lies and false promises, all to obtain money, and it ultimately collapsed, leaving in its wake countless victims,” Roos said.
Prosecutors say Bankman-Fried presided over a simple fraud disguised as revolutionary financial innovation. They traced Bankman-Fried’s theft of customer funds to 2021, when he ordered Ellison to spend $2 billion to buy out the FTX stake held by rival crypto exchange Binance. Ellison responded that the company only had half that amount and would have to borrow the rest from FTX customers, according to his testimony. Bankman-Fried told him to continue anyway.
“It is obvious that the accused knows he is stealing and committing fraud. And that’s exactly what they’re doing,” Roos said in his closing argument.
Prosecutors said Bankman-Fried again tapped client funds to fund $3 billion in venture capital investments, despite Ellison’s warning that the spending could prove ruinous if the market for cryptography was going south.
Bankman-Fried’s lawyers attempted to portray the defendant as a well-meaning, if overwhelmed, entrepreneur who paid too little attention to growing risks and trusted his subordinates too much.
This is a developing story. It will be updated.
Newmyer reported from Washington.