FTX founder Sam Bankman-Fried guilty of stealing billions from customers

Sam Bankman-Fried, who founded the FTX cryptocurrency exchange, on Thursday was convicted of seven fraud and conspiracy charges carrying a maximum sentence of 110 years in prison.

During the monthlong trial, Bankman-Fried gave testimony in the U.S. District Court for the Southern District of New York that stretched over three days. At one point during his time on the stand, the 31-year-old disgraced mogul testified that he believed his crypto company would fail.

“I thought there was maybe a 20 percent chance of success,” Bankman-Fried testified.

He also said he knew “basically nothing” about cryptocurrency before founding FTX in 2019.

Nevertheless, Bankman-Fried had pleaded not guilty to all seven counts of fraud and conspiracy. Prosecutors argued that he and others involved in FTX’s operations defrauded customers out of as much as $10 billion to cover losses and pay back loans owed by sister fund Alameda Research.

Former FTX chief executive Sam Bankman-Fried leaves Manhattan federal court in New York City on January 3, 2023. He was found guilty on Thursday of seven counts of fraud and conspiracy, defrauding crypto users of up to $10 billion.
Photo by ED JONES/AFP via Getty Images

The testimony of Caroline Ellison, Bankman-Fried’s former girlfriend and one-time chief executive officer of Alameda, garnered much media attention. She told the court that Bankman-Fried instructed her to steal billions of dollars from customers to cover losses and debt owed by the sister fund.

Bankman-Fried was accused of bullying Ellison during her testimony by scoffing and shaking his head.

At one time, FTX was seen as a tech success story. The company enjoyed a high profile with commercials featuring stars like football legend Tom Brady and comedian Larry David. However, the company collapsed in November 2022, and Bankman-Fried was arrested the following month in the Bahamas before being extradited to the United States.

“His crimes caught up to him. His crimes have been exposed,” Assistant U.S. Attorney Danielle Sassoon told the jury on Thursday, according to the Associated Press, which also reported that U.S. Attorney Damian Williams told the media after the verdict that Bankman-Fried “perpetrated one of the biggest financial frauds in American history, a multibillion dollar scheme designed to make him the king of crypto.”

“But here’s the thing: The cryptocurrency industry might be new. The players like Sam Bankman-Fried might be new. This kind of fraud, this kind of corruption is as old as time and we have no patience for it,” he added.

Bankman-Fried’s attorney said in a statement that while they respect the jury’s decision, they were “very disappointed with the result.”

Newsweek reached out to Bankman-Fried’s attorney via email for further comment Thursday night.

Judge Lewis A. Kaplan set a sentencing date of March 28, and Bankman-Fried is expected to appeal.