The founder of the bankrupt crypto exchange FTX, Sam Bankman-Fried, has been guilty of fraud with his customers’ money. A jury determined this on Thursday in the lawsuit against the former CEO.
The 31-year-old billionaire faced seven charges, two for fraud and five for conspiracy. He was found guilty on all counts. During the trial, which started in early October, prosecutors accused Bankman-Fried of stealing $8 billion (more than 7.5 billion euros) from his customers. That makes the case one of the largest financial frauds ever.
Bankman-Fried channeled funds from FTX customers to his investment fund Alameda Research, and then used them to make risky investments. When customers could not access their money, FTX went bankrupt. During the trial, several friends and colleagues stated that Bankman-Fried personally ordered his customers to be misled.
The former CEO admitted in court to having made mistakes in the run-up to the bankruptcy of FTX, but denies stealing from his customers. He stated that he thought it was legitimate for Alameda to “borrow” money from FTX, and that he did not realize how large the debt had become until both companies went bankrupt. According to him, his lawyers were fully aware of the transactions in which money from FTX customers was deposited into an Alameda bank account.
The maximum sentence for the fraud and conspiracy of which Bankman-Fried was found guilty is 110 years. The actual severity of his sentence will be determined in a hearing on March 28, 2024. Bankman-Fried stated shortly after the verdict on Thursday that he will appeal his conviction.
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