SBF’s Seven Deadly Sins Wire fraud, securities fraud, commodities fraud, money laundering conspiracy

SBF's Seven Deadly Crimes Uncovering Wire Fraud, Securities Fraud, Commodities Fraud, and Money Laundering Conspiracy

Author: Nikhilesh De, Sam Kessler, CoinDesk; Translator: Song Xue, LianGuai

After five weeks of trial, a New York jury found FTX founder and former CEO Sam Bankman-Fried (referred to as SBF) guilty of deceiving customers and lenders.

The sentencing is scheduled for March 28, 2024. SBF could spend decades in prison (theoretically up to 115 years).

Following the guilty verdict on all seven charges, U.S. prosecutor Damien Williams said outside the courthouse, “SBF committed one of the largest financial frauds in American history.” “This fraud, this corruption has been going on for a long time. We have no patience for it.”

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An appeal seems possible: defense lawyer Mark Cohen stated in a statement that SBF respects the jury’s decision but maintains his innocence and will continue to “vigorously fight the charges.”

The jury began deliberations at just past 3 p.m. Eastern time. Just before 7:40 p.m., the judge announced that they had reached a verdict. Lawyers and SBF returned to the courtroom, and shortly after, the guilty verdict was read in the packed courtroom.

During the reading of the verdict, SBF remained motionless. The judge instructed him to look at the jury box, while the jurors were asked to look at the court clerk and the judge.

“Your Honor, the verdict is unanimous,” a message from the 12 New Yorkers who voted guilty on all seven charges. The judge thanked the jurors for their service.

Coincidentally, the jury reached a guilty verdict on the anniversary week of CoinDesk’s award-winning news, which led to the downfall of this former cryptocurrency tycoon.

SBF’s parents present at the sentencing

As the guilty verdict was read, the defendant’s father, Joseph Bankman, buried his head in his lap in his seat in the gallery.

His mother, Barbara Fried, remained motionless, sitting up straight and expressionless, staring straight ahead.

After the judge left the courtroom, SBF stood up, and his lawyer came over to talk to him. He did not look back at the audience, even as his parents shuffled their feet towards the wooden partition behind him.

They embraced each other, gazing at Sam’s back, with about a dozen reporters circling around them.

As Sam was escorted to the exit in front of the courtroom, he still did not turn around to look at his parents or anyone else.

Just as he was about to reach the door, he glanced back at his parents one last time.

His mother placed her hand over her heart, letting out a heavy sigh.

One month of trial

31-year-old SBF was arrested in December last year and is being tried on charges of defrauding FTX investors and clients, as well as Alameda Research’s lender.

The once prestigious CEO of the cryptocurrency exchange has pleaded not guilty to all charges and went on trial in early October with federal prosecutors attempting to portray him as someone intentionally stealing client funds – approximately $8 billion – for various purchases and investments, including real estate, sports sponsorship, and venture capital.

His defense team argues that SBF is an overworked businessman who mistakenly believed that the company funds he used belonged to the companies themselves, rather than their clients or investors.

SBF admitted to “significant negligence,” but testified on the witness stand that he did not deceive anyone nor intend to take their funds.

“Many people were harmed – customers, employees – the company ultimately went bankrupt,” SBF said on the first day of his testimony to the jury. “…I made some small mistakes and some big ones.”

On November 2, 2023, prosecutors outside the court where SBF was convicted. (Nik De/CoinDesk)

Nearly a year ago, CoinDesk’s Ian Allison reported on Alameda holding a significant amount of FTX exchange token FTT. This news, combined with a tweet from Binance CEO Zhao Changpeng, sparked what SBF referred to as the “FTX run,” which resulted in the collapse of FTX. Ultimately, FTX, Alameda, and various subsidiaries of the company filed for bankruptcy.

FTX and Alameda’s key executives, including former CTO Gary Wang, former Head of Engineering Nishad Singh, and former Alameda CEO Caroline Ellison, pleaded guilty to multiple charges and testified against SBF during the trial, stating that they were following FTX’s instructions. The MIT graduate was a co-founder of both companies. Other former employees also testified that SBF set the direction for FTX’s operations.

However, SBF argues that he believed his carefully chosen subordinates could safely run these companies while he was busy being the head of this billion-dollar empire, including serving as the public face of FTX and lobbying regulators and lawmakers.

In summary, SBF is charged with wire fraud and conspiracy to commit wire fraud against FTX clients, wire fraud and conspiracy to commit wire fraud against Alameda’s lender, conspiracy to commit securities fraud against FTX investors, conspiracy to commit commodities fraud against FTX clients, and conspiracy to commit money laundering.

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