Summary
We’re closing the blog – thanks for following live coverage this evening. Here are some key links and takeaways:
Sam Bankman-Fried, the founder of now-bankrupt crypto exchange FTX, was found guilty on all counts of defrauding his customers in Manhattan federal court.
The seven counts were of wire fraud and conspiracy to launder money, and Bankman-Fried is facing decades in prison.
The trial shattered Bankman-Fried’s wunderkind image and brought down his allies, the Guardian US tech editor Blake Montgomery wrote.
The judge set 28 March 2024 for sentencing.
Bankman-Fried’s lawyer said in a short statement that his client “maintains his innocence” and plans to continue to fight the charges.
The US attorney said Bankman-Fried perpetrated “one of the biggest financial frauds in American history” and that “this kind of corruption is as old as time”.
The jury reached a verdict after just four hours of deliberation.
Bankman-Fried is still facing additional charges, but prosecutors have until February to decide whether the case will proceed.
Sam Bankman-Fried is still facing multiple counts of foreign bribery conspiracy and bank fraud that were scheduled for a separate trial due to start in March 2024, the same month he is supposed to be sentenced.
Judge Lewis Kaplan, however, today asked prosecutors to provide an update by February on whether that case will proceed.
The US attorney Damian Williams told reporters that Bankman-Fried “perpetrated one of the biggest financial frauds in American history, a multibillion-dollar scheme designed to make him the king of crypto”.
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As Sam Bankman-Friend now awaits sentencing, here’s a reminder of what his time in jail has been like, Reuters reports:
In August, Bankman-Fried’s lawyer Mark Cohen said the defendant was ‘subsisting on bread and water’ because Brooklyn’s Metropolitan Detention Center [MDC] had not provided him with vegan food as he requested. Cohen also said the jail had not given Bankman-Fried a daily Emsam patch to treat depression or Adderall to treat attention deficit hyperactivity disorder, despite an order from Judge Lewis Kaplan to do so.
It appeared that Bankman-Fried was eventually able to access the Adderall prescription his lawyers said he required.
The judge also allowed Bankman-Fried to travel to the federal courthouse in Manhattan to meet with his lawyers. Once the trial started, he was authorized to arrive several hours early to meet with attorneys.
Bankman-Fried was further allowed to use a dedicated laptop in the jail’s visitor room for multiple hours a day to review evidence his lawyers provided on hard drives, Reuters reported. The jail authorized him to buy a second laptop he could keep near his cell, prosecutors said.
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Carl Tobias, chair of the University of Richmond law school, said on Thursday evening that he was not surprised the jury returned a verdict so quickly:
It was a compelling case that prosecutors assembled and put on. I don’t think anything that Bankman-Fried said undermined their case or gave the jury much pause. They came in with a strong verdict. The southern district played it right by portraying it as a fraud case, not as a complicated cryptocurrency notion that was more complex than it needed to be. That’s clearly the way the jury saw it, and that was compelling to them.
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Sam Bankman-Fried’s parents had an emotional response to the guilty verdicts read in court today, according to reporters in the room:
As everyone’s heard by now, the verdict is guilty on all counts. I was in the courtroom for the reading. SBF showed little emotion, but Joe Bankman slumped over and Barbara Fried visibly cried. As SBF was led out by court marshals, he looked back at his parents and was shaking.
— Rachel Scharf (@rscharf_) November 3, 2023
CNN reported: “After the verdict was read, Bankman-Fried appeared shell-shocked. He did not turn around to see his parents until he was close to the exit door and gave them a somber smile as his mother pounded her hand into her chest on her heart, and then sank her face into her husband’s shoulder.”
Bankman-Fried’s parents, two longtime Stanford law school professors, were recently sued by FTX, which alleged the couple used funds from the company to enrich themselves. Joseph Bankman and Barbara Fried received funds from their son’s company through donations to causes and gifts.
Our earlier reporting on his parents:
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It’s notable that the conviction of Sam Bankman-Fried on Thursday came after just four hours of jury deliberation.
As some have pointed out, it took seven days in California for a jury to convict Elizabeth Holmes for fraud last year, with more than 50 hours of deliberation.
The Bankman-Fried trial lasted nearly a month.
It only took 4 hours for the jury to find SBF guilty on all counts related to fraud and money laundering... for comparison, it took Elizabeth Holmes' jury seven full days in court to come to a verdict. Great reporting here from @jacqmelinek: https://t.co/ZKEZ0HdDmQ
— amanda silberling (@asilbwrites) November 2, 2023
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Sam Bankman-Fried's sentencing date set for next year
US district judge Lewis Kaplan has set 28 March 2024 for Sam Bankman-Fried’s sentencing. Bankman-Fried is facing up to 110 years in prison on wire fraud and conspiracy to launder money.
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Key takeaways from Sam Bankman-Fried's trial
Everyone close to Bankman-Fried said they committed crimes … except Bankman-Fried: Three of Bankman-Fried’s closest confidantes confessed to financial crimes for their involvement in FTX’s downfall. Gary Wang and Nishad Singh, both FTX co-founders, and Caroline Ellison, Bankman-Fried’s ex-girlfriend and the former CEO of sister hedge fund Alameda Research, all pleaded guilty to wire fraud and conspiracy, cooperating with the prosecution to testify against Bankman-Fried.
Caroline Ellison was expected to be the prosecution’s star witness – she delivered: Ellison served as the CEO of Alameda Research. She was also Bankman-Fried’s on-again, off-again girlfriend. There was no one better-positioned, no one closer to Bankman-Fried, to shed light on his actions. Where Bankman-Fried denied committing fraud and blamed her, Ellison said directly and simply that he had.
The trial shattered Bankman-Fried’s wunderkind image and brought down his allies: Before his trial, Bankman-Fried was seen as the most responsible man in crypto. FTX was the safest exchange in the industry. He was poised to write the US rulebook for crypto via repeated testimony before Congress and close connections to lawmakers, lubricated by $100m in political contributions. Hangers-on flocked to that glowing reputation for their own financial and reputational gain.
When your lawyers tell you not to do interviews after you’ve been accused of a crime, it’s best to listen to them: Testifying in your own defense is a risky bet in the best of circumstances. It becomes extremely perilous when the prosecution has dozens of hours of recorded interviews and hundreds of on-the-record statements from you. Answering “I don’t recall” – as Bankman-Fried did more than 100 times in response to the prosecution’s questioning – may fail to endear you to jurors when there are records of times you did recall.
More on the key takeaways here:
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US prosecutor speaks after verdict: 'corruption as old as time'
US attorney Damian Williams has spoken out after the convictions against Sam Bankman-Fried:
The cryptocurrency industry might be new. The players like Sam Bankman-Fried might be new. But this kind of fraud, this kind of corruption, is as old as time and we have no patience for it. This case moved at lightning speed. That was not a coincidence. That was a choice. [This case] is a message, it’s a warning to every single fraudster out there who thinks that they’re untouchable or that their crimes are too complex for us to catch or that they’re too powerful for us to prosecute, or that they could try to talk their way out of it when they get caught.
"Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history," U.S. Attorney Damian Williams says. "The cryptocurrency industry might be new...but this kind of fraud, this kind of corruption is as old as time." https://t.co/NML57SVCdL pic.twitter.com/bPsjYo4yMX
— CNBC (@CNBC) November 3, 2023
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Sam Bankman-Fried's lawyer responds to verdict
Sam Bankman-Fried’s attorney has issued a short statement responding to the verdict, expressing disappointment and reiterating that his client maintains his innocence:
We respect the jury’s decision. But we are very disappointed with the result. Mr Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him.
STATEMENT FROM THE TEAM OF SAM BANKMAN-FRIED —
— Teddy Schleifer (@teddyschleifer) November 3, 2023
“We respect the jury’s decision. But we are very disappointed with the result. Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him." pic.twitter.com/Q69w6nKB34
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Bankman-Fried facing maximum sentence of 110 years.
If you’re just tuning in, here’s a helpful recap of the case and convictions, with summary points via Reuters:
The charges
Sam Bankman-Fried was convicted of seven counts of wire fraud and conspiracy to launder money. Prosecutors laid out how he embezzled customer money to help with losses at his crypto hedge fund and to buy Bahamas property, donate to campaigns and make other investments. He was also accused of lying to investors and lenders and directing Alameda’s chief executive officer to mislead fund creditors.
Bankman-Fried’s defense
Bankman-Fried’s lawyer had portrayed him as out of his depth and overwhelmed – a young man who “made mistakes” while his venture rapidly expanded, the Guardian previously reported from trial.
Ongoing charges
Five counts filed after his extradition from the Bahamas include foreign bribery conspiracy charges and bank fraud, and those were split off into a separate trial scheduled for March 2024.
Possible sentence
The counts for which he was convicted carry a maximum sentence of 110 years.
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The guilty verdict announced in a New York City courtroom tonight cements Sam Bankman-Fried’s downfall from a billionaire crypto star to convicted fraudster.
The 31-year-old now faces decades in prison, with his sentencing hearing to take place at a later date.
Inside the courtroom, Reuters reported that “Bankman-Fried stood and clasped his hands together as the verdict was read”.
Bankman-Fried was accused of swindling FTX customers out of some $10bn. Prosecutors said that his fraud extended from 2019 to November 2022, when FTX collapsed under the weight of a liquidity crisis, caused by the lending of customer funds to Alameda Research, FTX’s sister hedge fund, without telling them.
Catch up on our full story here.
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Sam Bankman-Fried found guilty
Hello, and welcome to our live coverage of the verdict in the trial of Sam Bankman-Fried, the founder of collapsed cryptocurrency exchange FTX.
Bankman-Fried has been found guilty on all counts after a multiweek trial.
He was charged with seven counts of wire fraud and conspiracy to launder money for his role in the multibillion-dollar collapse of FTX over a matter of days in 2022. Once hailed as a cryptocurrency trading virtuoso, he and his rapid downfall have become the industry’s greatest cautionary tale.
We’ll be covering developments and reactions here.
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