NEW YORK, Nov 2 (Reuters) - FTX founder Sam Bankman-Fried was found guilty on Thursday of stealing from clients of his now-bankrupt cryptocurrency exchange in one of the biggest financial frauds on record, a verdict that consolidated the 31 years The fall from grace of the former billionaire.
A 12-member jury in Manhattan federal court convicted Bankman-Fried of all seven counts she faced after a one month trial in which prosecutors argued he stole $8 billion from exchange users out of pure greed.
The verdict came just a year after FTX filed for bankruptcy in a rapid corporate crisis That shocked financial markets and wiped out his estimated $26 billion personal fortune.
The jury reached the verdict after just over four hours of deliberations. Bankman-Fried, who had pleaded not guilty to two counts of fraud and five counts of conspiracy, stood in front of the jury with his hands clasped in front of him as the verdict was read.
The conviction was a victory for the United States Department of Justice and Damian WilliamsManhattan's top federal prosecutor, who made rooting out corruption in the financial markets one of his top priorities.
"The cryptocurrency industry may be new, actors like Sam Bankman-Fried may be new, but this type of fraud is as old as time and we have no patience for it," Williams told reporters outside court.
Bankman-Fried, once the darling of the cryptocurrency world, known for his mop of unkempt curly hair and for wearing shorts and T-shirts instead of business clothes, joins the likes of admitted Ponzi schemer Bernie Madoff and the "Wolf of Wall Street." " fraudster Jordan Belfort as notable people convicted of major financial crimes in the United States.
U.S. District Judge Lewis Kaplan set Bankman-Fried's sentencing for March 28, 2024. The Massachusetts Institute of Technology graduate could face decades in prison.
His defense attorney, Mark Cohen, said in a statement that he was "disappointed" but respected the jury's decision.
"Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him," he said.
After Kaplan left the courtroom, Cohen put his arm around Bankman-Fried as they spoke at the defense table.
As members of the U.S. Marshals Service led Bankman-Fried away, she turned and nodded to her parents, Stanford Law School professors Joseph Bankman and Barbara Fried, who were sitting in the front row. of the courtroom audience. Fried looked up at him and crossed his arm over her chest.
Bankman-Fried will be tried next March on a second set of charges brought by prosecutors earlier this year, including alleged foreign bribery and bank fraud conspiracies.
[1/5]FTX founder Sam Bankman-Fried looks on during his fraud trial over the collapse of the bankrupt cryptocurrency exchange as US District Judge Lewis Kaplan instructs the jury and sends them to deliberate, in a courtroom federal in New York City, USA, November 2. 2023, in this courtroom... Acquire license rights
BANKMAN-FRIED WITNESS IN OWN DEFENSE
Bankman-Fried's was the first of several blockbuster cases Williams filed against former high-level cryptocurrency executives to go to trial. Several cryptocurrency companies went bankrupt last year after prices of bitcoin and other digital assets collapsed following a years-long boom.
Prosecutors argued during the trial that Bankman-Fried diverted money from FTX to his cryptocurrency-focused hedge fund, Alameda Research, despite proclaiming on social media and in television ads that the exchange prioritized the security of investors' funds. customers.
Alameda used the money to pay off its lenders and make loans to Bankman-Fried and other executives, who in turn made speculative venture investments and donated more than $100 million to U.S. political campaigns in an attempt to push for cryptocurrency legislation. which the accused considered favorable. his business, according to prosecutors.
Bankman-Fried took the calculated risk of testifying in her own defense for three days near the close of the trial after three former members of her inner circle testified against her. He faced aggressive questioning from the prosecution, often avoiding direct answers to the most probing questions.
He testified that while he made mistakes running FTX, such as failing to formulate a risk management team, he did not steal client funds. He said he thought Alameda's borrowing from FTX was permissible and did not realize how large its debts had grown until shortly before both companies collapsed.
"We thought we could build the best product on the market," Bankman-Fried testified. "It turned out basically the opposite of that."
'HE THOUGHT THE RULES DIDN'T APPLY'
Prosecutors had a different opinion.
"He did not negotiate for his three loyal aides to take that stance and tell them the truth: that he was the one who had the plan, the motive and the greed to loot the deposits of FTX customers - billions and billions of dollars. dollars - to give himself money, power, influence. He thought the rules didn't apply to him. He thought he could get away with it," prosecutor Danielle Sassoon told jurors Thursday.
The jury heard 15 days of testimony. Former CEO of Alameda Carolina Ellison and former FTX executives Gary Wang and Nishad Singh, who testified for prosecutors after pleading guilty, said he directed them to commit crimes, including helping Alameda loot FTX and lying to lenders and investors about the companies' finances.
The defense argued that the three, who have not yet been sentenced, falsely implicated Bankman-Fried in an attempt to obtain leniency in sentencing. Prosecutors may ask Kaplan to take his cooperation into account when deciding his punishment.
Bankman-Fried has been jailed since August after Kaplan revoked his bail, concluding that he likely tampered with witnesses.
Reporting by Luc Cohen and Jody Godoy in New York; Editing by Will Dunham, Daniel Wallis and Lincoln Feast
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