Sam Bankman-Fried, Former Billionaire Crypto King, Found Guilty Of Stealing Billions Of Dollars From Investors, Faces 110 Years In Prison

On Thursday, the founder of crypto exchange FTX, Sam Bankman-Fried, was found guilty of fraud and additional charges.

FTX was a cryptocurrency exchange that allowed its users to buy, sell and enter into contracts for crypto coins and tokens. 

Jurors found the disgraced crypto financier, 31, guilty of wire fraud, securities fraud and money laundering.

The charges stem from his fraudulent activities that involved customers on his FTX crypto exchange and lenders associated with his investment firm, Alameda Research.

Bankman-Fried’s attorney, Mark Cohen, told reporters that he maintains his client’s innocence and “will continue to vigorously fight the charges against him.” His sentencing hearing is set for March 28.

The trial began on October 3. The jury heard from a slew of witnesses, which included three of Bankman-Fried’s close friends, Gary Wange, Nishad Singh and Caroline Ellison.

The former CEO of Alameda, Ellison was also Bankman-Fried’s ex-girlfriend.

Bankman-Fried and his colleagues worked together, and occasionally lived together in a $30 million penthouse located in Nassau, Bahamas, owned by FTX.

Ellison pleaded guilty to federal charges and agreed to cooperate with prosecutors. She told the court that her ex-boyfriend had instructed her to commit fraud – he wanted her to funnel money from his customers at FTX into Alameda in order to pay back firms that Alameda had borrowed from.

Ellison said in court, “We ultimately took around $14 billion, some of which we were able to pay back… I sent balance sheets to lenders at the direction of Sam that incorrectly stated Alameda’s assets and liabilities.” 

Ellison also alleged that Bankman-Fried designed a strategy for her to transfer the funds between his two companies. She called him “very ambitious,” and stated that he thought he had a 5% chance of being president one day.

The former CEO was arrested on December 12, 2022, in Nassau, and pleaded not guilty to 13 charges, which included fraud and bribery. He was released later that month on a $250 million bond and was ordered to stay at his parents’ house in Palo Alto, California.

In August 2023, his bond was revoked for alleged witness tampering. He was later remanded to the custody of U.S. Marshals and then jailed.

Authorities started to investigate Bankman-Fried’s company in 2022 after it sought bankruptcy protection for its loss of billions of dollars in an extremely short time.

U.S. Attorney for the Southern District of New York Damian Williams called the case “one of the biggest financial frauds in American history,” and said, “from 2019 until earlier this year, Bankman-Fried and his co-conspirator stole billions of dollars from FTX customers. He used that money for his personal benefit, including to make personal investments and to cover expenses and debts of his hedge fund, Alameda Research.”

Before his arrest, Forbes had named Bankman-Fried “one of the richest people in crypto.” At the height of success, his company was valued at $40 billion.

Bankman-Fried co-founded Alameda Research in 2017, three years after his graduation from MIT, with a degree in physics. Two years later he started FTX.