Sam Bankman-Fried, co-founder and former CEO of crypto exchange FTX and trading firm Alameda Research, pleaded guilty to all seven counts related to fraud and money laundering.
The defendant is “charged with a broad scheme to embezzle billions of dollars of client funds deposited with FTX and mislead investors and lenders to FTX and Alameda Research,” said a statement from the US Attorney’s office for the Southern District of New York. .
The decision was issued on Thursday, following a five-week trial that dug deep into how one of the biggest crypto exchanges and its sister trading firm collapsed about a year ago. The U.S. Department of Justice charged Bankman-Fried, 31, about 11 months ago.
The court took about four hours to reach a verdict on six counts related to fraud and one count of money laundering.
Bankman-Fried quickly fell from the top of the crypto totem pole after a flawed Alameda balance sheet was revealed by CoinDesk in November 2022, which led to industry-wide panic and concern about FTX and its liquidity.
As the story unfolded, we learned that the problem was much, much bigger than many first thought: The executives behind the now-bankrupt FTX and Alameda allegedly stole more than $8 billion in client funds.
At his trial, Bankman-Fried testified that he did not defraud FTX customers or take their funds, but that Alameda “borrowed” money from the stock exchange. Prosecutors argued that Bankman-Fried made false promises and was responsible for the loss of billions of dollars for thousands of investors in FTX. They also claimed he had plenty of chances to clean up, but doubled up instead.
DOJ’s December 2022 indictment said Bankman-Fried knowingly defrauded FTX customers by misappropriating their deposits to invest in other companies and repay lenders and expenses. After reams of evidence and a verdict, this statement was found to be true by the court and jury.
The seven charges carry a total possible prison term of 115 years for the defendant.
Statutory maximum sentences are provided by the US Congress as “informational purposes only”, as any sentence will be determined by a judge. The defendant’s sentencing is set for March 28, 2024, Judge Lewis Kaplan said Thursday.
This article has been updated to include the date of sentencing.
