Jury Convicted Sam Bankman-Fried on All Seven FTX Counts

A federal jury in Manhattan convicted FTX founder Sam Bankman-Fried on all seven fraud and conspiracy counts on November 2, 2023, establishing criminal liability in the most consequential prosecution to emerge from the cryptocurrency exchange’s collapse.

The verdict covered two counts of wire-fraud conspiracy, two counts of wire fraud, one count of conspiracy to commit money laundering, one count of conspiracy to commit commodities fraud and one count of conspiracy to commit securities fraud. The Justice Department said the five wire-fraud and money-laundering counts each carried a statutory maximum of 20 years, while each commodities- and securities-fraud conspiracy count carried a five-year maximum.

Those maximums were informational, not a forecast of Bankman-Fried’s sentence. No prison term, forfeiture amount or restitution order was imposed on November 2.

What the jury decided

The 12-member jury returned its verdict after less than five hours of deliberation following a monthlong trial, according to contemporaneous Associated Press, Reuters and Axios reporting. Jurors rejected Bankman-Fried’s testimony that he had not intended to defraud customers, investors or lenders and that failures at FTX and Alameda Research resulted from mistakes rather than criminal conduct.

Prosecutors presented testimony from former Alameda chief executive Caroline Ellison, FTX co-founder Gary Wang and former FTX engineering director Nishad Singh. All three had pleaded guilty to crimes connected with FTX and testified under cooperation agreements. The government also used company records, messages and accounting evidence to argue that FTX customer assets had been diverted through Alameda and spent on investments, political contributions, property and other expenditures.

The convictions established that prosecutors proved the charged offenses beyond a reasonable doubt. They did not necessarily adopt every characterization, calculation or allegation offered during the trial, and they did not resolve claims pending in FTX’s separate bankruptcy proceedings.

Measuring the alleged financial harm

Contemporaneous accounts used different dollar totals because they described different groups and concepts. Reuters characterized the prosecution’s case as involving approximately $8 billion taken from FTX customers. The Associated Press described at least $10 billion involving customers and investors more broadly.

Those figures are not interchangeable. Neither was an event-day market valuation, a count of assets available in the bankruptcy estate or a forecast of creditor recoveries. The surviving reports do not supply a common measurement date, asset-pricing method or treatment of overlapping customer, investor and lender claims. This reconstruction therefore does not calculate a consolidated November 2 loss figure.

No cryptocurrency price, percentage return, trading volume or market-capitalization reaction is asserted. The cited records establish a criminal verdict, not a causal market move.

Why the verdict mattered

Bankman-Fried had been one of the digital-asset industry’s most prominent executives before FTX entered bankruptcy in November 2022. His conviction demonstrated that the exchange’s use of digital assets, affiliated trading entities and specialized software did not place its conduct beyond conventional federal fraud, conspiracy and money-laundering law.

The verdict also narrowed an important institutional distinction. FTX’s failure could no longer be framed solely as a liquidity crisis, governance breakdown or risky balance-sheet strategy. A jury had found its founder criminally responsible for schemes involving customers, investors and Alameda lenders.

The case did not determine whether any cryptocurrency was legally a security or commodity in every context. Although the conviction included separate conspiracies to commit securities fraud and commodities fraud, those counts addressed the charged schemes and their facts rather than creating a universal classification rule for digital assets.

What remained unresolved on November 2

Judge Lewis A. Kaplan scheduled sentencing for March 28, 2024. Bankman-Fried’s lawyer said after the verdict that the defense was disappointed, maintained his innocence and would continue contesting the case. Any sentence, appeal, forfeiture determination, bankruptcy recovery or disposition of charges outside the seven-count trial remained unresolved in the November 2 record.