The verdict came in less than five hours: guilty. Sam Bankman-Fried, founder of the FTX cryptocurrency empire, which went bankrupt in November 2022, was found guilty on seven counts by a New York jury on Thursday, November 2, including fraud, conspiracy and money laundering. The 31-year-old former financial whiz, known for his black hair and Bermuda shorts, faces up to 110 years in prison. The sentence will be handed down later, on March 28, 2024, by federal judge Lewis Kaplan, in line with standard US practice.
The trial, which opened in early October, went very badly for the entrepreneur, founder of a cryptocurrency exchange platform FTX, which was still valued at $26 billion (€24.5 billion) less than two years ago. First, Bankman-Fried appeared from prison, his bail having been revoked by the court this summer for his attempt to influence Caroline Ellison, his former girlfriend. She was the head of Alameda, the FTX subsidiary that orchestrated all the fraudulent speculation with FTX clients' funds from the Bahamas.
The prosecutor got a guilty plea from Ellison, who testified against Bankman-Fried, and explained how she lived in terror during the months of fraud before the edifice collapsed. The lying and stealing had, in her words, left her in "a constant state of dread." Two other employees, Gary Wang and Nishad Singh, also pleaded guilty and testified against their former boss. A childhood friend of Bankman-Fried and former FTX engineering director, Singh testified that he learned in September 2022 that Alameda had used $13 billion of FTX customer funds and was unable to repay them.
Finally, Bankman-Fried took the risk of testifying at his own trial, which is not mandatory – defendants have the right to remain silent – and is even highly unusual. "Bankman-Fried made the risky decision of testifying, and it does not appear to have helped him at all," wrote the New York Times on Thursday evening. Indeed, the defendant lost points when the prosecutor confronted him with the statements he was making in his heyday and the fraud orchestrated during that time. Refusing to admit blame or acknowledge his misdeeds, Bankman-Fried answered "I don't remember" more than 140 times to the prosecutor who was questioning him, according to a count by the New York Times. He said he had never cheated any customers but regretted not having implemented better risk management at FTX. "We sure should have," he said.
His lawyers tried to explain that their client was not the evil swindler described by legend, but a math nerd, overwhelmed by the new industry and the business he had been trying to create since 2019 in a new and chaotic universe. "In the real world, unlike the movie world, things can get messy," his lawyer Mark Cohen assured the jury.
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