SBF Trial, Day 18: Sam Bankman-Fried Found Guilty on All 7 Counts in Swift Verdict

11/03/23 • 5 min

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The downfall of former FTX CEO Sam Bankman-Fried from king of the crypto world to crypto scammer is complete.

A Manhattan jury of nine women and three men took less than five hours Thursday afternoon, day 18 of the high-profile trial, to convict Bankman-Fried on seven counts of fraud and conspiracy for stealing billions of dollars of his customers’ assets.

“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history, a multi-million scheme designed to make him the king of crypto,” said Damian Williams, U.S. attorney for the Southern District of New York in remarks following the verdict.

The guilty verdict came a year to the day after crypto publication CoinDesk published a story showing balance sheet irregularities at Bankman-Fried’s investment company, Alameda Research, that suggested the ties between Alameda and FTX were unusually close. Bankman-Fried now faces potentially decades in prison. Sentencing is scheduled for March 28.

After listening to Judge Lewis Kaplan read through 60 pages of instructions, jurors quickly concluded that Bankman-Fried was responsible for decisions that led to an $8 billion hole in its balance sheet, including the use of customer assets for political donations, investments and his own personal use. Prosecutors had reiterated this theme in a stinging, Thursday morning rebuttal.

And jurors rejected whole-hog Bankman-Fried’s defense team’s narrative that Bankman-Fried was being villainized for being a poor manager who didn’t create sufficient risk management systems. They also did not buy into Bankman-Fried’s claim that he was unaware of the severity of his company’s financial problems and that his inner circle, three of whom testified earlier in the trial as part of plea agreements, were to blame.

“We respect the jury’s decision,” said Bankman-Fried’s lead attorney, Mark Cohen. But we are very disappointed with the result. Mr. Bankman-Fried maintains his innocence and will continue to fight the charges against him.”

U.S. attorney Wiliams called Bankman-Fried’s crimes “ fraud” as “old as time,” and said his office had “no patience for it.”

He added: “This case moved at lightning speed, that was a choice, not a coincidence.”

Catch up on Unchained’s previous coverage:

The downfall of former FTX CEO Sam Bankman-Fried from king of the crypto world to crypto scammer is complete.

U.S. attorney Wiliams called Bankman-Fried’s crimes “ fraud” as “old as time,” and said his office had “no patience for it.”

He added: “This case moved at lightning speed, that was a choice, not a coincidence.”

Catch up on Unchained’s previous coverage:

Previous Episode

SBF Trial, Day 17: Closing Arguments Ask: ‘Villain or Good-Faith Actor?’

Prosecutors and defense attorneys in the trial of former FTX CEO Sam Bankman-Fried closed their arguments with similar stories to their opening statements more than three weeks ago: a tale of two Sams.

On Wednesday morning, day 17 of the trial, the government took jurors on a final grand tour of Bankman-Fried’s alleged lies, evasions and misdirections that they said aimed to hide the ugly truth of a gaping $8 billion hole in the crypto exchange’s balance sheet from investors and regulators, and that reflected his indifference to spending customer assets.

Assistant U.S. Attorney Nicholas Roos said that as the person overseeing FTX and the separate trading entity, Alameda Research, to which FTX funneled customer deposits, Bankman-Fried was the only person who could have been responsible for decisions that led to the deficit – criminally so.

“He told a story and he lied to you,” said Roos, who punctuated his more than two-hour presentation with metadata readings and time tables that seemed to devastatingly illustrate SBF’s ongoing awareness of his company’s financial debacle.

But in the afternoon, Bankman-Fried’s defense team portrayed him in softer tones, as a math nerd with no ill-intent and guilty only of bad management, particularly his failure to install adequate risk management protections. Attorney Mark Cohen said that the government had failed to prove its case as it sought to create a Hollywood villain responsible for the disappearance of the funds, cartooning his dress and personal habits to make their case. At one point, he seemed to appeal to jurors’ emotions, reminding them that Bankman-Fried had lived a big life and now faces prison.

Bankman-Fried faces potentially decades in prison on a total of seven counts of wire fraud and conspiracy. The prosecution will have an opportunity for rebuttal on Thursday, and jurors could begin deliberating his fate before the end of the day..

Often raising his voice for dramatic effect, Roos highlighted earlier testimony from Bankman-Fried’s inner circle and Google metadata indicating his awareness of the balance sheet woes to show his involvement in the company’s oversight. Bankman-Fried testified on Monday that he was unaware of the problems, suggesting others were to blame.

And Roos used the time tables to demonstrate separately that Bankman-Fried had lied to Congress about protecting customer assets even as he paid off loans using them, and that he had spent heavily on investments, political contributions and personal items, even after he knew of the massive balance sheet hole.

“This was a pyramid of deceit built by the defendant on a foundation of lies and false promises, all to get money, and eventually it collapsed, leaving countless victims in its wake,” Roos thundered.

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Next Episode

Two Genesis Creditors Describe Their Frustrations With the Bankrupt Crypto Lender - Ep. 565

Two Genesis creditors, BJ and Branden, who prefer to use pseudonyms for security reasons, spoke with Unchained about the alleged fraud by the crypto lender and its parent company, Digital Currency Group (DCG). The discussion is one of the first times Genesis creditors have spoken with a media organization about the situation.

BJ and Branden explain how they gave more loans to Genesis after it took a $1.1 billion hit from the liquidation of Three Arrows Capital and how they then came to be members of the ad hoc group, a collective of Genesis customers who came together to try and save the company from bankruptcy.

They talk about how they now want DCG to pay back the $1.1 billion it owes over a shorter timeframe and to pay back any Bitcoin in actual Bitcoin. The discussion with Unchained followed shortly after New York Attorney General Letitia James filed a lawsuit against Genesis, along with its parent company Digital Currency Group, and Gemini Trust.

Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform.

Show highlights:

what NYAG Letitia James alleged in the lawsuit against Gemini, DCG, and Genesis
how BJ and Branden became creditors of Genesis, including the role of the influence of MicroStrategy's Michael Saylor
how Genesis claimed it got into what it called a “liquidity mismatch”
how, after the Three Arrows Capital collapse, BJ and Branden were reassured that Genesis had "no issues" and "was back to business"
whether the trading and lending units of Genesis were all part of the same company and why that distinction is important
what the difference is between the ad hoc group and an unsecured creditors committee
what the creditors are proposing in order to get their assets back
why the creditors want to be paid in crypto, not in USD
whether the case will go to litigation and what Silbert can do to avoid it