Author: Joyce, BlockBeats Editor: Jack, BlockBeats

On November 3, according to Reuters, FTX founder Sam Bankman-Fried was found guilty on Thursday, with all seven charges against him confirmed by a 12-member jury in Manhattan federal court after a month-long trial. When the verdict was read, SBF stood up with his hands clasped. SBF pleaded not guilty to two counts of fraud and five counts of conspiracy.

SBF's sentencing is scheduled for March 28, 2024. Additionally, he will face trial for a second set of charges brought by prosecutors earlier this year, which include allegations of foreign bribery and conspiracy to commit bank fraud.

According to Bloomberg, key witnesses in SBF's trial include Alameda Research CEO Caroline Ellison, FTX co-founder Gary Wang, and FTX engineering chief Nishad Singh. As part of a cooperation agreement with prosecutors, all three have pleaded guilty, and several criminal defense attorneys following the case indicated that based on the testimonies of Caroline Ellison, Gary Wang, and Nishad Singh, they may not serve prison time or have a very low probability of doing so.

One Year Ago: FTX Collapse

On the evening of November 2, 2022, CoinDesk published an article titled “Divisions in Sam Bankman-Fried's Crypto Empire Blur on His Trading Titan Alameda's Balance Sheet”, pointing out significant risks in the balance sheet of SBF's crypto trading giant Alameda Research, with about $6 billion of its total $14.6 billion in assets being FTX's issued platform token FTT and assets borrowed against FTT as collateral.

This report triggered panic in the industry, which quickly turned into shock and anger over the following week. After experiencing a run on user withdrawals, a liquidity crisis, and a failed acquisition, the global crypto giant with a valuation of $32 billion rapidly collapsed, revealing an $8 billion asset shortfall and declaring bankruptcy on November 12. Meanwhile, Bitcoin fell below $17,000, and ETH dropped below $1,300.

On November 16, during a conversation with Vox reporter Kelsey Piper, SBF stated, "I never intentionally caused the situation we are in today, but sometimes things just happen without you realizing it."

On December 13, 2022, SBF was formally arrested in the Bahamas and subsequently extradited to the United States to await trial.

Summary of One Month of Trial News

On October 3, the highly anticipated FTX case began, with FTX founder SBF appearing in court. It had been 9 months and 20 days since SBF was arrested at his home in the Bahamas. SBF's lawyers attempted to prevent a Ukrainian client from testifying against him, arguing that such testimony "would only evoke sympathy and anger from the jury."

The criminal trial for SBF's fraud and conspiracy charges began on October 4. U.S. Assistant Attorney Nathan Rehn told the 12-member jury that the government would provide evidence and expert witnesses to prove that the former crypto mogul "deceived his customers" and used their funds to buy "money, power, and influence."

In the first week of the FTX fraud trial, SBF's ex-girlfriend Caroline Ellison, who is also the CEO of Alameda Research, provided extensive testimony. According to Caroline Ellison's latest testimony and notes from conversations with SBF, he instructed Alameda to sell BTC obtained from FTX customer funds, continuously selling Bitcoin if it exceeded $20,000 to stabilize its price below that threshold.

On October 17, another key member of SBF's inner circle, Singh, further confirmed explosive allegations of FTX's involvement in illegal political donations during the third week of the trial, including the fact that user account funds were misappropriated without prior permission. Singh's testimony indicated that Alameda would send him stolen customer funds, which he then used for political donations from his account. Additionally, he revealed that the stolen funds were used by SBF for investments and other expenses.

On October 26, SBF took the stand to testify on his own behalf. SBF's defense team attempted to argue that he had no intention of deceiving customers or investors, and that some of his company's operations relied on legal advice. During this appearance, SBF was questioned about whether he knew lawyers were involved in certain aspects of FTX's operations, his understanding of industry practices, his intentions regarding FTX funds at the time of the collapse, and his knowledge of the financial status of FTX and Alameda.

Due to ongoing disagreements between the defense and prosecution regarding whether SBF's interactions with lawyers should be fairly discussed in the defense's questioning, the judge decided to question witnesses outside the presence of the jury. Around 2 PM Eastern Time, SBF testified in Manhattan court, but the jurors were subsequently sent home.

In response to the prosecutor's questions, SBF frequently claimed not to remember what he had said, with "I am not sure" becoming a standard response. At times, he did not directly answer questions, prompting Judge Lewis Kaplan to tell him to "just answer the question."

On November 1, the prosecutor claimed in closing arguments that SBF had committed fraud and conspiracy to commit fraud. Prosecutor Nicolas Roos pointed out, "This is fraud, plain and simple. There was Alameda before FTX." The defense portrayed SBF as a well-meaning entrepreneur who made "terrible mistakes," denying that he directed his inner circle to engage in political donations and venture capital, or that he used customer funds to purchase luxury real estate. During the closing arguments, a defense attorney became emotional and was seen "in tears."

Additionally, on September 14 of this year, a Delaware district judge approved an order allowing the bankrupt cryptocurrency exchange FTX to sell or invest its $3.4 billion worth of cryptocurrency. After FTX was approved to liquidate assets, there were concerns that the massive asset sell-off would negatively impact the market. However, it seems that it did not cause significant market fluctuations.

Since October 26, FTX and Alameda have gradually transferred out approximately $170 million worth of 30 assets. Interestingly, after reports emerged that SBF was about to testify, FTT saw a surge of over 20%.

Image source: Lookonchain

The Era of the FTX Empire Comes to an End

After SBF was found guilty, former Spartan Group partner and Tangent co-founder Jason Choi wrote on X, "A chapter has ended."

Alfred Lin, a partner at Sequoia Capital who led investments in FTX, stated on social media that "Sequoia Capital was intentionally misled and deceived by lies."

Uniswap founder Hayden Adams expressed on X that SBF's conviction is not something to celebrate, as the industry's reputation has suffered a significant blow, with only a few law firms and various crypto opponents being the real winners.

In the development of the crypto industry, SBF and his FTX wrote a dramatically significant chapter. FTX was an innovator that brought a new world to the industry, but also an empire that plunged the market into darkness and chaos. SBF was the dreamer of the bull market and the "greedy fraudster" after the collapse. Regardless, the once glorious page of FTX has now turned.