NEW YORK – After a monthlong trial featuring testimony from 45 witnesses, a 12-member jury entered deliberations Thursday afternoon to determine whether FTX founder Sam Bankman-Fried is guilty of perpetrating one of the biggest financial frauds in U.S. history.
Bankman-Fried, 31, faces up to 115 years in prison if convicted on two counts of wire fraud and five counts of conspiracy for allegedly stealing $8 billion from FTX customers to prop up his crypto-focused hedge fund, Alameda Research.
Prosecutors Paint Picture of Greed and Deception
Throughout the high-profile trial in Manhattan federal court, prosecutors portrayed Bankman-Fried as a greedy fraudster who thought he could get away with raiding FTX customer deposits to satisfy his lavish lifestyle and thirst for power.
“He was the one with the plan, the motive and the greed to raid FTX customer deposits – billions and billions of dollars – to give himself money, power, influence,” prosecutor Danielle Sassoon told jurors Thursday. “He thought the rules did not apply to him. He thought that he could get away with it.”
The prosecution alleges Bankman-Fried secretly transferred customer funds from FTX to Alameda to make speculative venture investments, donate over $100 million to political campaigns and provide billions in loans to himself, Alameda CEO Caroline Ellison and other FTX executives.
To hide the missing funds, he allegedly directed staff to alter FTX’s bookkeeping systems and provide false financial statements to investors and regulators. When FTX collapsed in November 2022 amid a flurry of withdrawal requests, over one million customers lost access to billions in deposits.
Three Former Executives Implicated Bankman-Fried
Much of the prosecution’s case rested on damning testimony from Ellison and two other former Bankman-Fried confidants who pleaded guilty to fraud charges under cooperation agreements.
Ellison admitted to manipulating FTX’s accounting systems to conceal Alameda’s massive liabilities and facilitate the improper transfers under Bankman-Fried’s direction.
Two other witnesses, former Alameda CEO Sam Trabucco and FTX co-founder Gary Wang, also testified that Bankman-Fried controlled FTX’s customer funds and used them to cover Alameda’s losses.
In her rebuttal Thursday, Sassoon urged jurors to reject Bankman-Fried’s claims that the witnesses falsely implicated him to win sentencing leniency, arguing the evidence clearly shows he orchestrated the entire scheme.
Defense Claims “No Criminal Intent”
Bankman-Fried’s defense attorneys acknowledged he made mistakes at FTX, like failing to implement adequate risk management, but claimed he acted in good faith without criminal intent.
“Bad business judgments are not a crime,” said defense lawyer Mark Cohen in his closing argument Wednesday, adding that it’s natural for a young entrepreneur like Bankman-Fried to delegate tasks to subordinates.
Taking the witness stand in his own defense last week, Bankman-Fried apologized for FTX’s collapse but denied intentionally stealing customer funds or misleading investors. He blamed the debacle on poor management coupled with a broad crypto market crash that left Alameda unable to repay its debts.
Maximum Prison Sentence Could Exceed 100 Years
The twelve jurors now hold Bankman-Fried’s fate in their hands as they sift through weeks of complex financial evidence. A unanimous guilty verdict on all charges could result in over 100 years behind bars, though any prison sentence would be determined later by Judge Lewis Kaplan.
The charges focus on Bankman-Fried’s alleged misuse of FTX customer funds, but prosecutors are still investigating other potential criminal activity at the exchange. He could face additional charges related to campaign finance violations, market manipulation and international money laundering.
Regardless of the trial’s outcome, Bankman-Fried’s reputation lies in tatters after prosecutors exposed his web of lies and ethical lapses. The MIT graduate who once graced magazine covers as the face of crypto’s future now serves as a cautionary tale on the dangers of greed and deception.