Founder of the now-defunct international cryptocurrency exchange platform FTX Sam Bankman-Fried was convicted on seven charges of fraud by a jury of his peers in New York City, New York on 2 November. His sentencing will not take place until March of next year, as he is still to be tried on another set of charges.

Bankman-Fried, or SBF for short, was arrested in the Bahamas, from where he used to run his fraudulent crypto platform, in December 2022. FTX disallowed customer withdrawals back in November 2022. The same month, they also filed for bankruptcy. The criminal wrongdoing was that FTX did not hold onto customer deposits like it proclaimed in their terms of service and advertisement.

Instead, they allowed themselves to funnel huge sums, around $8 billion, into a crypto investment firm called Alameda Research. Alameda Research was also founded by Bankman-Fried, and was run by his close associates, including his polyamorous love interest Caroline Ellison.

Much to SBF’s chagrin,

his old girlfriend decided to enter a cooperation agreement with the prosecution in exchange for a lesser sentence.

Her testimony, during which she even broke down in tears as a show of remorse, was most likely very impactful in swaying the jury. At direct examination, the prosecution’s first question was: ‘When you were working at Alameda, did you commit any financial crimes?’ To which Ellison replied: ‘Yes, we did’. In answering the follow-up question, she elaborated that by ‘we,’ she meant herself, Sam Bankman-Fried, and others at the company; while those crimes included ‘fraud, conspiracy to commit fraud, and money laundering’. She even further explained that her fraudulent activities involved ‘incorrectly stating the amount of our assets and our liabilities that made Alameda’s balance sheet look less risky than it really was’.

At cross-examination, the defence did try to convince the jury that she was willing to say anything just to save her own skin. However, when it was their turn in the cross-examination, the prosecution was able to counter that by playing a recording of Ellison admitting to all these crimes, which was taped before she agreed to cooperate with them.

Bankman-Fried himself also took the stand.

While it is generally not advised for defendants to testify on their own behalf in a criminal trial, in this case, there was only him and one expert witness hired by the defence council who was willing to testify in court in SBF’s defence, as opposed to the over dozen witnesses called by the prosecution.

SBF often claimed to not remember or not be aware of incriminating details. In their closing argument, the prosecution pointed out to the jury that the defendant answered ‘I don’t recall’ or any variations of that over 140 times during cross-examination. Evidently, this did not do too much for his credibility, as he was perfectly capable of remembering facts that would help his case from years ago.

Bankman-Fried’s main claim was that he had only learnt about $8 billion missing from FTX customer funds as late as October 2022, a month before the collapse, and the actual crimes were committed by his subordinates unbeknownst to him. Prosecution showed multiple instances of written communication between Bankman-Fried and FTX staff that had been found during discovery and that contradicted the defendant’s claims.

The jury came back with a verdict only three hours after the trial had ended, much sooner than originally anticipated. They found Sam Bankman-Fried unanimously guilty on all seven counts of fraud. The harshest interpretation of the sentencing guidelines would result in a 115-year prison sentence for him—however, evidently, that is not likely to be the case. Still, Bankman-Fried will almost certainly spend the next couple of decades behind bars, which is a giant blow to the 31-year-old man who was once hailed as one of the greatest entrepreneurial and financial talents of his generation.

He still has five charges left to be tried for in March, which include a bit of bribery on top of the frauds for a change. This is connected to SBF’s political donations.

Sam Bankman-Fried was the second largest donor to the Democratic Party in the 2022 midterms election cycle

with $40 million of his personal wealth donated to the party, the second most only behind George Soros.

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