The resounding trial lasted five weeks. The verdict was delivered very quickly, in less than five hours: guilty. Sam Bankman-Fried, accused in particular of fraud, criminal conspiracy and money laundering, was found guilty this Thursday, November 2 by a New York jury of the seven counts brought against him.
“SBF”, the fallen cryptocurrency star, founder of the cryptocurrency exchange platform FTX, faces up to 110 years of criminal imprisonment in total. Federal Judge Lewis Kaplan will pronounce his sentence on March 28. “Sam Bankman-Fried committed one of the largest financial frauds in American history,” Manhattan federal prosecutor Damian Williams said after the verdict was read. “A multi-billion dollar scheme designed to make him the king of cryptos.”
It is a success for the prosecution, which buried “SBF” under millions of documents, several of them damning, as well as the testimonies of three of his former close collaborators and his former girlfriend. All claimed to have acted under the direction of their former boss, who was in charge of all the key decisions that enabled the misappropriation of client money and senseless risk-taking by Alameda Research, whose borrowing from FTX reached up to ‘to approximately 14 billion dollars.
SBF recognized “big mistakes”
“Who had control? That’s the question,” said deputy prosecutor Nicolas Roos at the hearing on Wednesday. “It was one person: the accused.” Faced with this barrier, the former billionaire, whose fortune soared with the implosion of FTX and Alameda, tried to plead good faith, presenting the face of a young entrepreneur with no experience rather than that of a criminal. He admitted to “big mistakes”, but always denied knowingly breaking the law.
His lawyer, Mark Cohen, accused, at the hearing, the prosecutor of presenting him as a “monster”, a “bad guy”, by caricaturing his actions and his personality. The young thirty-year-old even chose to testify at his trial, a rare initiative because it was considered too risky. But this hearing, failing to strengthen him, weakened him even more, the former crypto educator with superior intelligence showing himself to be evasive and convoluted under the fire of the prosecution’s questions.
Sam Bankman-Fried also tried to accuse his former colleagues, sometimes accusing them of incompetence, sometimes of having warned him too late or insufficiently of Alameda’s financial situation. “We respect the jury’s decision, but we are very disappointed with the result,” responded Mark Cohen. “Mr. Bankman-Fried maintains that he is innocent and will continue to vigorously contest the charges against him.”
The bankruptcy of FTX, which came after six months of turbulence and other failures, penalized the world of cryptocurrencies, which is barely recovering from this crossing of the desert. “The cryptocurrency industry may be new, with new players like Sam Bankman-Fried, but this type of fraud, corruption, is as old as time,” commented Damian Williams.
“Sam Bankman-Fried thought he was above the law”
The setup carried out by “SBF” thus differed, in its simplicity, from most of the scams experienced in the cryptocurrency world and which require a certain sophistication. “Sam Bankman-Fried thought he was above the law. Today’s verdict proves he was wrong,” Justice Minister Merrick Garland said in a statement.
In addition to Thursday’s conviction, the former trader is summoned for a second trial, in early March, for bribery of a foreign agent and illegal political donation. He is, in fact, accused of having paid around $150 million in bribes to Chinese officials. The graduate of the prestigious MIT in Boston is also targeted for donations to politicians, drawn from funds from FTX clients, notably to the presidential campaign of Joe Biden.
For Damian Williams, this Thursday’s verdict “is a message, a warning to all the crooks who think they are untouchable, who think their crimes are too complex for us to catch them.” “Let them think twice,” he warned. “If they persist, we will have enough handcuffs for everyone.”