Sam Bankman-Fried found guilty of fraud

Former cryptocurrency kingpin Sam Bankman-Fried has been convicted of fraud. A New York jury delivered its verdict on November 2, concluding a trial in which Bankman-Fried defended himself against allegations that he mismanaged his crypto exchange FTX and trading company Alameda Research.

After more than a month of trial, the jury took four and a half hours to decide Bankman-Fried’s fate, finding him guilty on all seven counts, including wire fraud, conspiracy to commit wire fraud and conspiracy with a view to committing money laundering. He is expected to be sentenced by Judge Lewis Kaplan on March 28 next year and faces decades in prison.

Bankman-Fried launched FTX in 2019 and its valuation rose stratospherically during the post-pandemic crypto boom. But prosecutors accused the operation of fraud “from the beginning.” While he promoted the exchange to investors and the public as safe and secure, Bankman-Fried’s former colleagues testified that he falsified numbers and granted secret and special privileges for Alameda – including a $65 billion credit line and a flag that allowed Alameda’s balance dive into the negative because he illicitly borrowed funds from FTX clients.

Bankman-Fried spent the months leading up to his trial antagonizing prosecutors and the court. Initially under house arrest, he was sent to prison in August for violations of his bail conditions, including using a VPN to watch a football game and disclosing the diary entries of his ex-girlfriend, Caroline Ellison, former CEO of Alameda Research, who pleaded guilty to federal charges And testified against him at trial – has The New York Times.

In court, Bankman-Fried’s defense argued that he had honestly failed to manage a high-risk business. He denied directly overseeing the damning code updates that allowed Alameda to spend FTX funds and said he did not participate in the exchanges or asked employees about billions of dollars missing. His testimony was contradicted by Ellison, his former roommates Adam Yedidia and Gary Wang (the co-founder of FTX), and family friend Nishad Singh; all had worked under Bankman-Fried and later cooperated with prosecutors. Wang, Singh and Ellison await sentencing.

Correction at 10:30 p.m. ET: The jury’s deliberations lasted four and a half hours, no less than four. We regret the error.