NEW YORK – FTX founder Sam Bankman-Fried’s spectacular rise and fall in the cryptocurrency industry – a journey that included his testimony before Congress, a Super Bowl advertisement and dreams of a future run for president – hit a new bottom Thursday when a New York jury convicted him of fraud in a scheme that cheated customers and investors of at least $10 billion.
She urged jurors to reject Bankman-Fried’s insistence when he testified over three days that he never committed fraud or plotted to steal from customers, investors and lenders and didn’t realize his companies were at least $10 billion in debt until October 2022.
Bankman-Fried was required to stand and face the jury as guilty verdicts on all seven counts were read. He kept his hands clasped tightly in front of him. When he sat down after the reading, he kept his head tilted down for several minutes.
Former federal prosecutors said the quick verdict – after only half a day of deliberation – shows how well the government tried the case.
Bankman-Fried’s attorney, Mark Cohen, said in a statement they “respect the jury’s decision. But we are very disappointed with the result.”
The trial attracted intense interest with its focus on a fraud on a scale not seen since the 2009 prosecution of Bernard Madoff, whose Ponzi scheme over decades cheated thousands of investors out of about $20 billion. Madoff pleaded guilty, was sentenced to 150 years in prison, where he died in 2021.
U.S. Attorney Damian Williams said they engaged in one of the biggest frauds in U.S. history.
They showed the jury pictures of Bankman-Fried sleeping on a private jet, sitting with a deck of cards and mingling at the Super Bowl with celebrities including the singer Katy Perry. Assistant U.S. Attorney Nicolas Roos called Bankman-Fried someone who liked “celebrity chasing.”
“It’s both wrong and unfair, and I hope and believe that you have seen that it’s simply not true,” he said. “According to the government, everything Sam ever touched and said was fraudulent.”
With that money, prosecutors said, the Massachusetts Institute of Technology graduate gained influence and power through investments, contributions, tens of millions of dollars in political contributions, Congressional testimony and a publicity campaign that enlisted celebrities like comedian Larry David and football quarterback Tom Brady.
Becoming tearful as she described the collapse of the cryptocurrency empire last November, Ellison said the revelations that caused customers collectively to demand their money back, exposing the fraud, brought a “relief that I didn’t have to lie anymore.”
Nishad Singh, the former head of engineering at FTX, testified that he felt “blindsided and horrified” at the result of the actions of a man he once admired when he saw the extent of the fraud as the collapse last November left him suicidal.
Ellison, Wang and Singh all pleaded guilty to fraud charges and testified against Bankman-Fried in the hopes of leniency at sentencing.
His communications, including hundreds of phone calls with journalists and internet influencers, along with emails and texts, eventually got him in trouble when the judge concluded he was trying to influence prospective trial witnesses and ordered him jailed in August.
In his closing, Roos mocked Bankman-Fried’s testimony, saying that under questioning from his lawyer, the defendant’s words were “smooth, like it had been rehearsed a bunch of times?”