‘Crypto King’ Sam Bankman-Fried guilty of FTX fraud

A jury has handed down the verdict in a fraud case against ex-crypto mogul Sam Bankman-Fried which included Australian victims.

Former crypto tycoon Sam Bankman-Fried has been found guilty of stealing customer money as he built his empire – which included a reported 30,000 Australian investors.

The month-long federal trial has been an ordeal for Bankman-Fried after some of his closest associates testified that he was key to all the decisions that saw eight billion dollars vanish from his FTX trading platform.

Bankman-Fried, 31, was until late last year a poster-boy for the crypto industry and estimated to be worth $US26 billion by Fortune magazine, before his empire collapsed spectacularly.

The Massachusetts Institute of Technology graduate was charged on seven counts of fraud and faces decades behind bars.

“Now it’s your turn to decide who to believe,” Judge Lewis Kaplan told the jury of nine women and three men before the verdict was handed down.

“He was ambitious” and had “the arrogance to think that he could get away with a fraud, prosecutors argued.

In closing arguments, prosecutors portrayed the defendant as an extremely smart man consumed by greed who knew what he was doing when FTX funds were secretly funnelled to his personal hedge fund.

“Find him guilty,” US prosecutor Danielle Sassoon told the jury earlier on Thursday local time.

“He was ambitious” and had “the arrogance to think that he could get away with a fraud,” she added.

The defense said their client had acted in “good faith” and was overtaken by circumstances and the financial ineptitude of close associates who testified against him to gain leniency from prosecutors.

Joseph Bankman and Barbara Fried, parents of Sam Bankman-Fried. Picture: AFP

The star witness in the trial was Bankman-Fried’s former associate and on-and-off-again girlfriend Caroline Ellison who told the jury that they had stolen “around $US14 billion” from clients of the FTX cryptocurrency trading platform before it collapsed into bankruptcy late last year.

The money was used to prop up Alameda Research, Bankman-Fried’s personal hedge fund for which he picked Ellison as CEO.

In November 2022, the FTX empire imploded, unable to cope with massive withdrawal requests from customers panicked to learn that some of FTX’s funds had been committed to risky operations by Alameda.

That money was used to finance venture capital deals, political contributions as well as swanky real estate in the Bahamas.

It also went toward paying tens of millions of dollars to celebrities, including Tom Brady and Gisele Bündchen, to gain their endorsement of FTX, as well as buying the naming rights for the Miami Heat’s home arena.

The top FTX and Alameda executives lived and worked in a luxury apartment complex in the Bahamas until Bankman-Fried was arrested and extradited to the United States late last year.

Originally published as ‘Crypto King’ Sam Bankman-Fried guilty of FTX fraud