Updated Nov 2, 2023 - Economy

Sam Bankman-Fried found guilty in FTX fraud case

Photo illustration: Sarah Grillo/Axios. Photo: Yuki Iwamura/Bloomberg via Getty Images

Sam Bankman-Fried was found guilty Thursday on all seven charges against him, including fraud on FTX customers and investors, fraud on Alameda's lenders and conspiracy to commit money laundering.

Why it matters: SBF, one of the most high-profile names in crypto, has been convicted in one of the "biggest financial frauds in American history," where $8 billion in customer deposits went missing from what was then the world's third-largest crypto exchange.

  • The blow-up of FTX and its sister hedge fund Alameda Research — both now in bankruptcy — was so messy, it's been compared to Enron.

Of note: Attorneys for SBF said in a statement to media that Bankman-Fried "maintains his innocence and will continue to vigorously fight the charges against him."

What they're saying: "Sam Bankman-Fried thought that he was above the law," Attorney General Merrick Garland said in a statement late Thursday.

  • "Today's verdict proves he was wrong. This case should send a clear message to anyone who tries to hide their crimes behind a shiny new thing they claim no one else is smart enough to understand: the Justice Department will hold you accountable."

Meanwhile, U.S. Attorney Damian Williams said in a statement: "This kind of fraud, this kind of corruption is as old as time ... We have no patience for it."

  • The case serves as "a warning to every fraudster who thinks they're untouchable, that their crimes are too complex for us to catch, that they are too powerful to prosecute, or that they are clever enough to talk their way out of it if caught," he added.
  • "Those folks should think again, and cut it out.  And if they don't, I promise we'll have enough handcuffs for all of them."

The big picture: The U.S. government presented a solid case against SBF, linking the testimonies of key insiders and company documents to prove beyond a reasonable doubt that his actions while leading the two firms were criminal, and not simply negligent.

  • The jury took less than five hours to reach their verdict on Thursday.

Flashback: The government presented tearful testimony from Caroline Ellison, the former CEO of Alameda. There was the remorseful one from Nishad Singh, former director of engineering, and more from FTX co-founder Gary Wang.

Meanwhile, the defense likely suffered from SBF's own testimony.

What's next: Judge Lewis Kaplan set SBF's sentencing for March 28, 2024. He has a second trial on four additional charges slated for earlier that month.

  • SBF can appeal the verdict, but not until sentencing.

Brady Dale contributed reporting.

Editor's note: This story has been updated with additional information.

Go deeper