NEW YORK, Nov 2 (Reuters) – The jury in Sam Bankman-Fried’s fraud trial began deliberations on Thursday following a monthlong trial in which prosecutors accused the FTX cryptocurrency exchange founder of stealing billions of dollars of customer funds.
Bankman-Fried is poised to learn his fate in Manhattan federal court nearly a year after FTX declared bankruptcy as its customers raced to withdraw their funds in a collapse that shocked cryptocurrency markets and obliterated the 31-year-old’s fortune, once estimated by Forbes at $26 billion.
Bankman-Fried has pleaded not guilty to two counts of fraud and five counts of conspiracy. The 12 jurors must agree unanimously in order to reach a verdict of guilty or not guilty on the various charges. U.S. District Judge Lewis Kaplan said he would allow jurors to stay in court until 8:15 p.m. EDT (0015 GMT) on Thursday if they wish to do so, though deliberations could also extend into next week.
The jury is not scheduled to deliberate on Friday.
Prosecutors have argued that Bankman-Fried stole $8 billion in one of the biggest financial frauds in U.S. history. They contended that Bankman-Fried looted customer funds to prop up his crypto-focused Alameda Research hedge fund, make speculative venture investments and donate more than $100 million to U.S. political campaigns in a bid to promote cryptocurrency legislation Bankman-Fried viewed as favorable to his business.
The prosecution said he directed other executives to tweak FTX’s computer code to allow Alameda to siphon funds, and that the hedge fund then lent the money to Bankman-Fried and other executives to spend as they wish. Bankman-Fried also directed others to falsify financial statements, prosecutors said.
[1/2]Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, walks outside the Manhattan federal court in New York City, U.S. March 30, 2023. REUTERS/Amanda Perobelli Acquire Licensing Rights
“He lied to gain customers’ trust, to get their money, and then he decided the rules didn’t apply to him and his business,” prosecutor Danielle Sassoon told jurors earlier on Thursday in a rebuttal to the defense’s closing argument a day earlier.
Testifying in his own defense, Bankman-Fried acknowledged that he made mistakes that hurt customers while running FTX, such as not hiring a chief risk officer, but insisted he never intended to commit fraud.
“Business decisions made in good faith are not grounds to convict,” defense lawyer Mark Cohen said in his closing argument to the jury on Wednesday. “Poor risk management is not a crime. … Bad business judgments are not a crime.”
Sassoon likened that argument to someone robbing a jewelry store and justifying their actions by saying there was no security guard.
“That’s not a defense. That was a strategy,” Sassoon said. “The defendant knew what he was doing was wrong, and that’s why he never hired a risk officer.”
Bankman-Fried faced straight ahead, occasionally looking to his right toward the jury box, as Sassoon made her argument. Damian Williams, the top federal prosecutor in Manhattan who has prioritized cracking down on financial crime, looked on from the courtroom audience’s front row.
Bankman-Fried could face decades in prison if convicted, though his sentence would be determined at later date by U.S. District Judge Lewis Kaplan based on a range of factors.
Reporting by Luc Cohen in New York; Editing by Will Dunham
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