Key Points
- FTX founder Sam Bankman-Fried was found guilty on Thursday of defrauding customers.
- A New York court found he stole from customers of the now bankrupt cryptocurrency exchange.
- He faces sentencing in March 2024.
FTX founder Sam Bankman-Fried has been found of defrauding customers of his now-bankrupt cryptocurrency exchange in one of the biggest financial frauds on record.
A 12-member jury in Manhattan federal court convicted him on all seven counts he faced after a month-long trial in which prosecutors made the case that he stole US$8 billion ($12.5 billion) from the exchange's customers out of sheer greed.
Friday's verdict came just shy of one year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and erased his estimated US$26 billion ($40 billion) personal fortune.
The jury reached the verdict after just over four hours of deliberations. Bankman-Fried stood and clasped his hands together as the verdict was read.
Bankman-Fried, a Massachusetts Institute of Technology graduate whose mother Barbara Fried and father Joseph Bankman are both Stanford University law professors, had pleaded not guilty to two counts of fraud and five counts of conspiracy.
US District judge Lewis Kaplan set Bankman-Fried's sentencing for 28 March 2024.
His defence lawyers, who objected to several rulings by Kaplan before and during the trial, are expected to appeal the verdict.
After Kaplan left the courtroom, Bankman-Fried spoke with his lawyers at the defence table with his head down. His father put his arm around his mother as they looked on from the courtroom's front row.
Bankman-Fried is also set to go on trial on a second set of charges brought by prosecutors earlier this year, including for alleged foreign bribery and bank fraud conspiracies.
Once the darling of the crypto world, Bankman-Fried - who was known for his mop of unkempt curly hair and for wearing shorts and T-shirts rather than business attire - instead joins the likes of admitted Ponzi schemer Bernie Madoff, "Wolf of Wall Street" fraudster Jordan Belfort and insider trader Ivan Boesky as notable people convicted of major US financial crimes.
Prosecutors argued during the trial that Bankman-Fried siphoned money from FTX to his crypto-focused hedge fund, Alameda Research, despite proclaiming on social media and in television advertisements that the exchange prioritized the safety of customer funds.
Alameda used the money to pay its lenders and to make loans to Bankman-Fried and other executives - who in turn made speculative venture investments and donated upwards of US$100 million ($155.6 million) to US political campaigns in a bid to promote cryptocurrency legislation the defendant viewed as favourable to his business, according to prosecutors.
