SBF’s seven sins: wire fraud, securities fraud, commodities fraud, conspiracy to launder money

A New York jury found after a five-week trial of FTX founder and former CEO Sam Bankman-Fried (SBF) that he defrauded customers and lenders.

The tentative sentencing date is March 28, 2024. SBF could spend decades in prison (theoretically up to 115 years).

“SBF committed one of the largest financial frauds in American history,” U.S. Attorney Damian Williams said outside the courthouse after the guilty verdicts on all seven charges were announced. “This fraud, this corruption, has been going on for a long time. We have no patience for it.”

An appeal seems likely: Defense attorney Mark Cohen said in a statement that SBF respects the jury's decision but maintains its innocence and will continue to "vigorously fight the charges."

Jurors began deliberating just after 3 p.m. ET. Just before 7:40 p.m., the judge said they had reached a verdict. Lawyers and SBF returned to the courtroom, and soon after, the guilty verdict was read to the packed courtroom.

SBF did not move as the verdict was read. The judge instructed him to look toward the jury box, while the jurors were asked to look toward the court clerk and the judge.

"Your honor, the verdict is unanimous," was the message from the 12 New Yorkers who voted guilty on all seven counts. The judge thanked the jurors for their service.

Coincidentally, the jury’s guilty verdict came on the one-year anniversary of CoinDesk’s award-winning journalism that led to the former cryptocurrency mogul’s downfall.

SBF's parents attended the sentencing

The defendant's father, Joseph Bankman, buried his head in his lap in his seat on the observation deck as the guilty verdict was read.

His mother, Barbara Fried, remained motionless, her back straight, her face expressionless, staring straight ahead.

After the judge left the courtroom, SBF stood up and his lawyers leaned over to talk to him. He did not look back at the gallery, even as his parents shuffled toward the wooden partition behind him.

They hugged each other and stared at Sam's back as about three dozen reporters gathered around them.

As Sam was escorted to the exit at the front of the courtroom, he still didn't look back at his parents or anyone else.

Just as he was about to reach the door, he took one last look at his parents.

His mother put her hand to her chest and made a thumping sound.

One month trial

SBF, 31, was arrested in December and is on trial for allegedly defrauding FTX investors and customers, as well as lenders to Alameda Research.

The once-prominent cryptocurrency exchange CEO pleaded not guilty to all charges and went on trial in early October, with federal prosecutors seeking to portray him as someone who deliberately stole customer funds — about $8 billion — for a variety of purchases and investments, including real estate, sports sponsorships and venture capital.

His defense team argued that SBF was an overworked businessman who mistakenly believed that the company funds he was using belonged to the companies, rather than to their clients or investors.

SBF admitted "gross negligence" but said in the witness box he did not defraud anyone and did not intend to take their funds.

“A lot of people got hurt — customers, employees — and the company ended up going bankrupt,” SBF said during the first day of jury testimony. “… I made some small mistakes and some big mistakes.”

Prosecutors outside the court where SBF was convicted on November 2, 2023. (Nik De/CoinDesk)

FTX collapsed nearly a year ago after CoinDesk’s Ian Allison reported that Alameda held a large amount of FTX’s exchange token, FTT, a revelation that combined with a tweet from Binance CEO Changpeng Zhao triggered what SBF called a “run on FTX,” following which FTX, Alameda, and the company’s various subsidiaries filed for bankruptcy.

Key executives of FTX and Alameda, including former CTO Gary Wang, former engineering head Nishad Singh, and former Alameda CEO Caroline Ellison, pleaded guilty to multiple charges and testified against SBF during the trial, saying they had taken instructions from FTX. The MIT graduate was a co-founder of both companies. Other former employees similarly testified that SBF set the direction for FTX's operations.

SBF, however, argued that he trusted his handpicked lieutenants to run the companies safely while he was busy at the head of his multibillion-dollar empire, including serving as the public face of FTX and lobbying regulators and lawmakers.

In summary, SBF is charged with wire fraud and conspiracy to commit wire fraud against FTX customers, wire fraud and conspiracy to commit wire fraud against Alameda lenders, conspiracy to commit securities fraud against FTX investors, conspiracy to commit commodities fraud against FTX customers, and conspiracy to commit money laundering.