Once known as the beloved crypto king, the 31-year-old Sam Bankman-Fried has been found guilty on all seven counts related to fraud and money laundering at the end of a month-long trial in New York. The trial only lasted a mere four hours as the jury found Sam Bankman-Fried, the shaggy-haired tycoon who founded cryptocurrency exchange FTX, guilty of all seven fraud and conspiracy charges that exposed one of the biggest financial frauds on record in the cryptocurrency industry.
The verdict cemented the 31-year-old former billionaire’s fall from grace as it came just shy of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated $26 billion personal fortune. While Sam Bankman-Fried and his team will try to appeal the decision, he could face up to 110 years behind bars.
Related: FTX Sues Sam Bankman-Fried and Associates for $1 Billion
How the Trial Played Out
On Thursday afternoon, the jury of nine women and three men, a diverse group of jurors from all walks of life, began deliberations after nearly two weeks of testimony over the past month. The trial started with the witness statement of Caroline Ellison, former girlfriend of Sam Bankman-Fried, who runs Alameda Research, a cryptocurrency trading firm he founded, blaming Sam Bankman-Fried for the sudden failure of both companies less than a year ago.
The trial continued with Federal prosecutors, three former top advisers to Sam Bankman-Fried, all of whom had pleaded guilty and agreed to cooperate, accused Sam Bankman-Fried of treating FTX like his personal piggy bank, saying he used client money to support his ambitions and support Alameda Research.
While the prosecutors called upon many former employees of Bankman-Fried as witnesses, the defence only called on three witnesses, including Bankman-Fried himself, to argue that he had no intent to steal money and defraud anyone. His lawyer also shifted his closing statement and hit back against the three former top advisers, stating they are testifying against him to avoid harsher prison sentences.
However, the prosecution quickly countered that they were taking responsibility for their actions in pleading guilty, which Sam Bankman-Fried was adamant in refusing to do.
“He did not bargain for his three loyal deputies taking that stand and telling you the truth: that he was the one with the plan, the motive and the greed to raid FTX customer deposits – billions and billions of dollars – to give himself money, power, influence. He thought the rules did not apply to him. He thought he could get away with it.” Moreover, in their closing statement, the prosecution told the jury that Mr Bankman-Fried had built his crypto empire on a “foundation of lies and false promises.”
US Attorney Damian Williams Held Nothing Back Against Sam Bankman-Fried
After four hours of deliberation, the attorneys reached a consensus and deemed Sam Bankman-Fried guilty of the actions. US Attorney Damian Williams was the harshest in his statement after the verdict as he claims: “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.”
Assistant US attorney Nicolas Roos said in his closing arguments: “He took the money. He knew it was wrong. He did it anyway because he thought he was smarter and better and could figure his way out of it.”
Mark Cohen, Bankman-Fried’s lawyer, claimed they respect the decision, but they are disappointed with the result and claimed they will appeal to fight for his innocence. “Mr Bankman-Fried maintains his innocence and will vigorously fight the charges against him.”
The Fall From Grace of Sam Bankman-Fried Signals the Risks of Cryptocurrency
Cryptocurrencies have been around for a while but have always been seen with suspicion. Cases of frauds, thefts, and usage to fund terrorism do not help its case either.
While underlying cryptography and blockchain are widely considered secure, cryptocurrencies are volatile investments. Many cryptocurrency exchanges and wallets have faced security breaches over the years, sometimes resulting in the theft of millions of dollars in coins, like in the case of Dread Pirate Roberts, who operated the infamous dark web drug market, Silk Road.
Moreover, cryptocurrency investment requires accurate price monitoring due to its price volatility. For example, Bitcoin experienced rapid surges and crashed in its value – to nearly $65,000 in November 2021 before dropping to just over $20,000 a year and a half later before regaining its rise in 2023. This is why many describe it as a speculative bubble.