What Now? Analyzing the Fallout of Sam Bankman-Fried’s Verdict
Jacob Hummel
Finance Editor
On November 3rd, the extremely publicized trial of Former FTX CEO Sam Bankman-Fried came to an end, as the former Crypto King was found guilty of all seven charges that were brought against him. These charges included two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of money laundering conspiracy, and one count of commodities fraud. For those following the trial, it was clear that the outcome was not trending in Bankman-Fried’s favor after the court was presented with damning testimonies from many of his close friends and colleagues.
In a last-ditch effort to save himself, Bankman-Fried took the stand and tried to defend himself under oath. This is often a worst-case scenario for the defendant because it puts them at risk of being exposed under the prosecutions questioning. For Bankman-Fried, he wasn’t an exception to this trend. His testimony to the court revolved around the premise that at FTX his main function was focusing on long-term strategy and high-level decisions, which left him unaware of his subordinates’ wrongdoings. He claimed to only become aware of the billions in lost customer funding until mere months before the company’s collapse. He also made attempts to defend his extravagant lifestyle, and other key pieces of the story against him. In response, the prosecution recalled many of his past statements that highlighted inconsistencies within his story. Bankman-Fried claimed that he had no recollection of making comments that conflicted with his story.
Shortly after his testimony, the Manhattan jury unanimously returned seven guilty verdicts for Bankman-Fried, leaving him in unclear waters. On March 28, 2024, Bankman-Fried will have to return to court for sentencing, where Judge Lewis Kaplan will be advised by prosecutors on the gravity of the penalty. With the charges brought against him, Bankman-Fried could be facing up to 110 years in prison if Kaplan decides to follow through and enforce the maximum sentence.
The next step for Bankman-Fried is to decide whether or not he wants to appeal his criminal convictions. If he was to appeal, his defense would need to present the appellate court with some grounds for the court’s decision to be overturned in whole or in part. However, his team needs to act quickly, as the deadline to submit an appeal is November 20th.
Another obstacle for Bankman-Fried is the potential for a second trial, as there are still six outstanding charges pending against him. These charges were separated from the other seven due to a pre-trial win for Bankman-Fried’s legal team. However, it is unclear whether the government will drop or amend these charges, but as it stands, on March 28th there is a scheduled jury selection for the second set of charges.
For Sam Bankman-Fried, the future is filled with uncertainty. Coming off a major loss in his initial sentencing, with a potential second round of charges on the horizon, Bankman-Fried and his team need to act fast and decide the best course of legal action to protect the fallen Crypto King. Looking to the future, the public will have a better understanding of how Bankman-Fried’s team will be moving forward by November 20th, the deadline for his appeal.
Contact Jacob at hummelja@shu.edu