Prominent Evidence That Led to Sam Bankman-Fried's Conviction

Sam Bankman-Fried needed exactly a year to go from being a beloved billionaire entrepreneur to a convicted criminal.

On November 2nd, a New York jury found Bankman-Fried guilty on all seven charges brought against him by the Department of Justice, including defrauding customers and investors of his cryptocurrency exchange, FTX. Bankman-Fried, according to the jury, was involved in a conspiracy to obtain over $8 billion from FTX customers and funnel it to his trading firm, Alameda Research, which then spent the funds on Bahamian real estate, startup investments, and political donations.

The jury's decision came exactly a year after Bankman-Fried's empire first began to crumble when the crypto news outlet Coindesk published a leaked balance sheet of Alameda Research. The balance sheet appeared to show that Alameda's financial position was much worse than it seemed. Concerns about FTX's solvency quickly grew, and customers withdrew billions of dollars. However, FTX, as it turned out, didn't have the funds to cover them, and less than two weeks later, the company declared bankruptcy.

Since then, Bankman-Fried has consistently denied using customers' funds improperly. He did not plead guilty and testified to his innocence last week in a Manhattan courtroom. However, the jury was not convinced. It took them less than five hours to find him guilty on all charges.

Bankman-Fried faces up to 120 years in prison, with the sentence to be determined later by Judge Lewis Kaplan.

Mark Cohen, Bankman-Fried's attorney, responded to the verdict with a statement: "We respect the jury's decision. But we are very disappointed with the outcome. Mr. Bankman-Fried asserts his innocence and will continue to vigorously fight the charges against him."

The government's case against Bankman-Fried relied on testimony from his closest associates, all of whom took a position claiming that he instructed them to commit fraud to steal billions from FTX customers.

Here were some of the most significant and shocking pieces of evidence presented during the trial, shedding light on Sam's fraudulent empire.

Alameda Research has been accepting deposits from FTX customers for many years. A little less than a year ago, the cryptocurrency exchange FTX collapsed as its users collectively attempted to withdraw billions of dollars but couldn't. It soon became apparent that the money was held by Alameda Research, Bankman-Fried's trading firm, which was making huge bets across various parts of the crypto ecosystem.

This wasn't anything new. In fact, Gary Wang, the co-founder and CEO of FTX, testified that since FTX's inception in 2019, customer funds always flowed directly into bank accounts belonging to Alameda, which could then use the money as it saw fit. In the same year, Wang hard-coded an exception into FTX that made Alameda the only user on the exchange allowed to have a negative balance, effectively borrowing customers' funds. Wang says that Bankman-Fried instructed him to create this exception.

These borrowed funds were then scattered around the world, as claimed by Peter Easton, a professor of accounting at Notre Dame and an expert witness for the prosecution. During his testimony, Easton presented an analysis that showed billions of customer funds were borrowed and reinvested in Bahamian real estate (including a $30 million penthouse where Bankman-Fried lived), crypto startups, and political donations. (However, on October 31st, Bankman-Fried stated that he "doesn't necessarily agree" with the accuracy of the exhibit.)