Jury convicts Sam Bankman-Fried on all counts

On November 2, jurors found FTX founder Sam Bankman-Fried (SBF) guilty on all counts charged. The final sentence by Judge Lewis Kaplan of the Southern District of New York will be handed down on March 28, 2024.

On all counts

The jury comprised nine women and three men, according to Decrypt. Deliberations lasted four hours, resulting in SBF’s conviction on all seven counts, including fraud and conspiracy.

Each count carries a maximum penalty of 5 to 20 years in prison. In total Bankman-Fried faces up to 115 years in prison. The sentencing is scheduled for March 28 of the following year.

According to The Block, SBF’s parents—Joseph Bankman and Barbara Fried—were present for much of the trial. Earlier media reports said that they played a key role in turning their son from a nerd into a crypto magnate with connections.

Bankman-Fried’s legal team said they respect the jury’s decision.

STATEMENT FROM THE TEAM OF SAM BANKMAN-FRIED —

“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

— Teddy Schleifer (@teddyschleifer) November 3, 2023

“But we are very disappointed with the result. Mr. Bankman-Fried maintains his innocence and will continue to vigorously fight the charges against him,” the statement said.

Prosecutor Damian Williams, for the Southern District of New York, said at a November 2 press conference that the founder of FTX “committed one of the largest financial frauds in American history.”

“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

“Although the cryptocurrency industry is new … this kind of fraud, this kind of corruption is as old as the world,” Williams said.

According to him, the sentence serves as a warning to all who commit crimes with digital assets.

What happens next?

Partner Samson Enzer of Cahill, Gordon & Reindel told The Block that SBF may pursue an appeal. In particular, he could continue to shift blame to his lawyers — allegedly their involvement in the business gave the founder of FTX confidence in the propriety of his actions.

Until the final sentencing, Bankman-Fried will remain in custody at a Brooklyn jail, to which he was sent on August 11.

In a conversation with Decrypt, counsel Christopher Zukis suggested that if SBF receives 25 years or more, he would likely face an enhanced-security regime. He did not rule out that the former head of the crypto exchange would serve his sentence on the West Coast, ‘closer to his family’. However Zukis did not see this as a positive.

“There [on the West Coast] is far more gang involvement and far more prison politics than on the East Coast”.

The publication notes that California prisons are not the most attractive option. Specifically, in the Victorville facility there are ongoing violence incidents, and the Herlong prison recently lost its status as livable.

According to Zukis, the founder of FTX is likely to be sent either to Herlong, Lompoc or Mendota.

Former Andreessen Horowitz partner Katie Haun suggested that Bankman-Fried would spend “decades” in prison.

Now that SBF has been found guilty on all counts, people are asking what sentence he may get. I think the answer is likely decades in prison. People confuse the statutory maximum sentence (the max a judge is allowed to give) with the sentencing guidelines recommended sentence… pic.twitter.com/C7Tn81A7xh

— Kathryn Haun (@katie_haun) November 3, 2023

“People confuse the statutory maximum sentence (the maximum a judge can impose) with the recommended sentence under the sentencing guidelines (essentially advisory guidance for judges on what should be the starting point for sentencing, given the defendant’s crimes and personal history). Judges always start from the range recommended by the sentencing guidelines”, Haun noted.

According to her calculations, SBF will receive 27–34 years of incarceration. However, she did not rule out that, theoretically, a judge could impose the maximum of 115 years.

Industry reactions

Galaxy Digital CEO Mike Novogratz, in an interview with CNBC, noted that Bankman-Fried “was a kind guy, though he was a huckster.”

“He was a kind guy, though he was a huckster,” says Galaxy Digital CEO @novogratz on Sam Bankman-Fried following the disgraced FTX founder’s guilty verdict. “He stole my money. He stole lots of people’s money. I do think justice gets served here.” pic.twitter.com/uur5dYhlfU

— Last Call (@LastCallCNBC) November 3, 2023

«He stole my money. He stole money from many people. I truly think justice will prevail here,” Novogratz stressed.

Skybridge Capital chief Anthony Scaramucci called the verdict a “sad day in many respects.” Yet he acknowledged that it is also “a good day for justice.”

“It’s a sad day in many respects, but it’s also a good day for justice,” says @Scaramucci on Sam Bankman-Fried’s guilty verdict. pic.twitter.com/3EC8UUgvuJ

— Last Call (@LastCallCNBC) November 3, 2023

In September 2022, FTX acquired 30% of SkyBridge’s shares for $30 million. In response, the hedge fund bought $10 million worth of FTX tokens, which are now virtually worthless.

In early 2023 Scaramucci discussed his friendly relationship with Bankman-Fried and called him a “traitor.” Later he said that SBF caused damage to the cryptocurrency industry in the US from a regulatory perspective.

Euro Pacific Capital president Peter Schiff urged launching prosecutions of “all dirty politicians who took bribes from [Bankman-Fried].”

Now that #SBF has been convicted it’s time to go after all the dirty politicians who accepted his bribes. SBF never could have gotten away with his scam without their help. Regulators were also complicit and their ineptitude proves that free markets can do their job much better.

— Peter Schiff (@PeterSchiff) November 3, 2023

«SBF никогда бы не сошло с рук мошенничество без их помощи. Регуляторы также были замешаны в этом, и их некомпетентность доказывает, что свободные рынки могут выполнять свою работу гораздо лучше», — написал Шифф.

In 2020, the former FTX head donated $5.22 million to Joe Biden’s campaign fund, becoming one of his biggest sponsors. In May 2022, Bankman-Fried pledged to spend “more than $100 million” on the US presidential election. In August 2023, prosecutors charged him with using $100 million of client funds to finance political campaigns.

Earlier in court, SBF associates — former FTX chief technology officer Nishad Singh and former Alameda CEO Caroline Ellison. Ellison disclosed details of the meeting before the collapse and described a backdoor on client funds and illiquid investments.

Recall, in October new management and creditors of FTX approved a plan to compensate clients. By mid-2024, users of the exchange could receive payouts on claims totaling $9.2 billion.