File image of convicted FTX founder Sam Bankman-Fried
| Photo Credit: Reuters
FTX founder Sam Bankman-Fried was discovered responsible on Thursday of defrauding customers of his now-bankrupt cryptocurrency exchange in a single of the largest monetary frauds on file, a verdict that cemented the 31-year-old former billionaire‘s fall from grace.
A 12-member jury in Manhattan federal courtroom convicted him on all seven counts he confronted after a monthlong trial wherein prosecutors made the case that he stole $eight billion from the change’s customers out of sheer greed. The verdict got here simply shy of one 12 months after FTX filed for chapter in a swift company meltdown that shocked monetary markets and erased his estimated $26 billion private fortune.
The jury reached the decision after simply over 4 hours of deliberations. Bankman-Fried stood and clasped his palms collectively as the decision was learn.
Bankman-Fried had pleaded not responsible to 2 counts of fraud and 5 counts of conspiracy.
The conviction represented a victory for the U.S. Justice Department and Damian Williams, the highest federal prosecutor in Manhattan, who made rooting out corruption in monetary markets one of his high priorities.
Sentence to be decided
Bankman-Fried, a Massachusetts Institute of Technology graduate whose mom and father each are Stanford University regulation professors, might face a long time in jail when his sentence is decided by U.S. District Judge Lewis Kaplan at a later date.
His defence legal professionals, who objected to a number of rulings by Kaplan earlier than and throughout the trial, are anticipated to enchantment the decision.
Once the darling of the crypto world, Bankman-Fried — who was recognized for his mop of unkempt curly hair and for sporting shorts and T-shirts quite than enterprise apparel — as an alternative joins the likes of admitted Ponzi schemer Bernie Madoff, “Wolf of Wall Street” fraudster Jordan Belfort and insider dealer Ivan Boesky as notable individuals convicted of main U.S. monetary crimes.
The jury started deliberations on Thursday after listening to the prosecution’s rebuttal to the defence closing arguments delivered a day earlier.
The case
Prosecutors argued throughout the trial that Bankman-Fried siphoned cash from FTX to his crypto-focused hedge fund, Alameda Research, regardless of proclaiming on social media and in tv commercials that the change prioritised the security of buyer funds.
Alameda used the cash to pay its lenders and to make loans to Bankman-Fried and different executives — who in flip made speculative enterprise investments and donated upwards of $100 million to U.S. political campaigns in a bid to advertise cryptocurrency laws the defendant considered as beneficial to his enterprise, based on prosecutors.
Bankman-Fried took the calculated threat of testifying in his personal protection over three days close to the shut of trial after three former members of his interior circle testified towards him. He confronted aggressive cross-examination by the prosecution, typically avoiding direct solutions to probably the most probing questions.
He testified that whereas he made errors working FTX, reminiscent of not formulating a risk-management crew, he didn’t steal buyer funds. He mentioned he thought Alameda’s borrowing from FTX was allowed and didn’t notice how massive its money owed had grown till shortly earlier than each firms collapsed.
“We thought that we might be able to build the best product on the market,” Bankman-Fried testified. “It turned out basically the opposite of that.”
Prosecutors had a unique view.
“He didn’t 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 that he could get away with it,” prosecutor Danielle Sassoon informed the jury on Thursday.
The jury heard 15 days of testimony. Former Alameda CEO Caroline Ellison and former FTX executives Gary Wang and Nishad Singh, testifying for the prosecution after coming into responsible pleas, mentioned he directed them to commit crimes, together with serving to Alameda loot FTX and mendacity to lenders and buyers in regards to the firms’ funds.
The protection argued the three, who haven’t but been sentenced, falsely implicated Bankman-Fried in a bid to win leniency at sentencing. Prosecutors could ask Kaplan to take their cooperation into consideration in deciding their punishment.
Bankman-Fried has been jailed since August after Kaplan revoked his bail, having concluded he doubtless tampered with witnesses. Kaplan blocked Bankman-Fried from calling a number of proposed knowledgeable witnesses, and dominated he couldn’t testify in regards to the involvement of legal professionals in FTX choices at concern within the trial.