Sam Bankman-Fried defrauded his customers and lenders, a New York jury found after a five-week trial for the FTX founder and former chief executive, Reuters reported Friday.
The jury reached the verdict on the first anniversary, coincidentally, of the CoinDesk scoop that spurred the former crypto mogul's downfall.
Bankman-Fried, 31, was arrested last December and tried on allegations of defrauding FTX investors and customers, and Alameda Research's lenders. The once-prominent crypto exchange CEO pleaded not guilty to all charges, and went to trial at the beginning of October, where federal prosecutors sought to paint him as someone who deliberately set out to steal his customers' funds – around $8 billion – for use in a variety of purchases and investments, including real estate, sports sponsorships and venture investments. His defense team argued that Bankman-Fried was an overworked businessman who made the mistake of assuming the company funds he used belonged to those companies, rather than their customers or investors.
Bankman-Fried himself acknowledged that "there were significant oversights," but said he did not defraud anyone or set out to take their funds on the stand.
"A lot of people got hurt – customers, employees – and the company ended up in bankruptcy," Bankman-Fried said on his first day of testimony before the jury. "... I made a number of small mistakes and a number of larger mistakes."
FTX collapsed about a year ago, after a CoinDesk article revealed that Alameda held a massive amount of FTX's exchange token, FTT, which combined with tweets from Binance CEO Changpeng Zhao sparked what Bankman-Fried described as a "run on FTX" – ultimately leading to FTX, Alameda and the companies' various subsidiaries to file for bankruptcy.
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Key FTX and Alameda executives, including former Chief Technology Officer Gary Wang, former Head of Engineering Nishad Singh and former Alameda CEO Caroline Ellison, all testified against Bankman-Fried during the trial, saying they all pleaded guilty to various charges but had taken direction from the MIT grad who co-founded the companies. A number of other former employees similarly testified that Bankman-Fried set the direction for FTX's operations. Bankman-Fried himself, however, argued that he trusted his handpicked lieutenants to safely operate the companies while he was busy with his own roles as the head of the multibillion-dollar empire, including being the public face and lobbying regulators and lawmakers.
All told, Bankman-Fried was charged with wire fraud and conspiracy to commit wire fraud against FTX's customers, wire fraud and conspiracy to commit wire fraud against Alameda's lenders, conspiracy to commit securities fraud against FTX's investors, conspiracy to commit commodities fraud against FTX's customers and conspiracy to commit money laundering.
Read all of CoinDesk's coverage here.
