Case study · Expert witness and litigation supportSam Bankman-Fried and FTX: how forensic accounting testimony traced the missing billions.
The jury in the FTX trial heard from former insiders. It also heard from an accounting professor who matched ledgers to bank records and showed where customer money went. What that testimony did, and why it held up on appeal.
By Geoff Davis, Fraud Examination ServiceFacts current to November 10, 202610 min read
Fraud Examination Service had no role in this matter. This case study relies on the court decisions, government releases and reporting listed under Sources. Bankman-Fried denies taking customer funds and continues to seek review.
An exchange, a trading firm and one ledger.
FTX was a cryptocurrency exchange founded by Sam Bankman-Fried; Alameda Research was the trading firm he also controlled. In early November 2022, a version of Alameda’s balance sheet was published, customers rushed to withdraw, and on November 11 FTX filed for bankruptcy.5
According to the SEC, customers’ dollar deposits were sent to bank accounts controlled by Alameda, some held in the name of a company called North Dimension, while the amounts owed were tracked inside FTX under an internal account labelled “fiat@ftx.com.”4 The Second Circuit summarized trial testimony that special privileges in FTX’s code let Alameda draw on a line of credit of up to $65 billion.5
Bankman-Fried was indicted in December 2022, tried in October 2023, and convicted on all seven counts on November 2, 2023.1,2
From collapse to the Supreme Court.
Key dates from the court record and government releases.
Bankruptcy
FTX files for bankruptcy; Bankman-Fried is replaced as chief executive.
Indictment
Criminal charges are unsealed; the SEC and CFTC file civil cases.
Trial begins
Jury selection opens a roughly month-long trial in Manhattan.
The expert testifies
Professor Peter Easton walks the jury through the flow of funds.
Verdict
Guilty on all seven counts.
Sentence
25 years in prison and forfeiture of over $11 billion.
Affirmed
The Second Circuit upholds the conviction.
Petition filed
Bankman-Fried asks the Supreme Court to hear the case.
The forensic accountant’s role.
The government’s case had insiders: former executives who testified under cooperation agreements. Cooperators can be attacked as self-interested. Records cannot be cross-examined in the same way, and that is where the expert came in.
Peter Easton, a Notre Dame professor of accountancy who had worked on Enron, WorldCom and Parmalat, was retained to analyze the money moving between FTX and Alameda and to test whether bank account balances matched FTX’s internal records.6 The Brattle Group, which supported him, describes him as the prosecution’s sole testifying expert, analyzing internal controls, financial reporting and fund flows through commingled accounts.7
“It is only customer funds.”Easton, on the source of more than $400 million sent to Modulo Capital, as reported by Notre Dame and Bloomberg Law6,8
His testimony followed specific payments to their source. On a share repurchase from Binance, he told the jury that over a billion dollars came from customer funds; repayments to lenders such as Celsius, Abra, Maple and Anchorage were, in his words, all from customer funds.9 He presented the analysis through charts and graphs he had built for the purpose, which Notre Dame and Brattle both highlight.6,7
Why it mattered
The insiders explained intent. The expert showed the money. Together they left the jury with a documented answer to the question every fraud case turns on: whose money was it, and where did it go?
The $9 billion gap.
The core of the analysis was a reconciliation. Take what FTX’s own records said Alameda was holding for customers, then compare it with what Alameda’s bank accounts actually contained.
Source: Easton testimony, as reported by Notre Dame6 and Bloomberg Law8
At sentencing, the judge found losses of about $8 billion to customers, $1.7 billion to investors and $1.3 billion to lenders.10 Prosecutors had asked for 40 to 50 years; the defense asked for five to six and a half. The court imposed 25 years.3,10
Source: Associated Press10
The “repaid in full” argument
FTX’s bankruptcy estate has since paid creditors in rounds. After the fifth distribution in July 2026, cumulative recoveries for the main customer classes were about 105%.12 Those percentages are measured against account values on the bankruptcy date, when crypto prices were depressed, and objecting creditors argued that is not a true recovery.11 The courts treated later recoveries as irrelevant to whether a fraud was committed: the Second Circuit held that subsequent appreciation does not undo it.5 For litigators, this is a reminder that the date at which loss is measured is itself an expert question.
What makes expert testimony admissible.
Federal Rule of Evidence 702 was amended on December 1, 2023, a month after the verdict. The amendment did not change the case, but it changed the standard every financial expert in federal court now meets.14
Two changes matter most. The party offering the expert must now show the court it is more likely than not that each requirement is met. And the Committee Note says that treating the sufficiency of an expert’s basis, or the application of the method, as a question of weight rather than admissibility is an incorrect application of the rule. The Note adds that forensic experts should avoid assertions of absolute or one hundred percent certainty.14
In Florida courts, section 90.702 sets out the same three reliability conditions: testimony based on sufficient facts or data, produced by reliable principles and methods, and reliably applied to the facts of the case.15
Six lessons for counsel retaining a financial expert.
- 01
Frame a narrow question
Whose money was it, where did it go, and when? A sharp question produces testimony a jury can hold.
- 02
Reconcile ledgers to bank records
Internal records show what a company says. Bank records show what happened. The gap is the evidence.
- 03
Trace payment by payment
Follow specific transfers to their source; aggregate opinions are easier to attack.
- 04
Build exhibits a jury can follow
Charts that show the flow of funds carry an opinion further than tables do.
- 05
Stay inside the data
Rule 702(d) requires each opinion to stay within what the method and the records support.
- 06
Prepare for the timing defense
When loss is measured, and against what, will be argued. Settle it in the analysis first.
Questions people ask.
Short answers drawn from the record. Each links back to the sources below.
The prosecution’s testifying expert was Peter Easton, a professor of accountancy at the University of Notre Dame, supported by a team from The Brattle Group. He analyzed how money moved between FTX and Alameda Research and whether bank balances matched FTX’s own ledgers.
Easton testified that as of June 2022 about $11.3 billion of FTX customer funds should have been held by Alameda, but only about $2.3 billion was in its bank accounts, a gap of roughly $9 billion. At sentencing, the judge found customer losses of about $8 billion.
On November 2, 2023, a jury convicted him on all seven counts, including wire fraud and conspiracies to commit securities fraud, commodities fraud and money laundering. On March 28, 2024 he was sentenced to 25 years in prison and ordered to forfeit over $11 billion. The Second Circuit affirmed in June 2026.
FTX’s bankruptcy estate has paid creditors in rounds; after the fifth distribution in July 2026, cumulative recoveries for the main customer classes stood at about 105%. Those percentages are measured against account values on the November 2022 bankruptcy date, when crypto prices were low, and the courts held that later recoveries do not undo the fraud.
Under Federal Rule of Evidence 702, as amended on December 1, 2023, the party offering the expert must show it is more likely than not that the testimony will help the jury, rests on sufficient facts or data, uses reliable methods and applies them reliably. Florida’s section 90.702 sets out the same three reliability requirements.
Sources and method.
Facts were checked against each source on November 10, 2026. Court decisions and government releases are preferred; trial testimony is cited through contemporaneous reporting. The forfeiture is stated as over $11 billion, the figure in the government’s release.
- 1U.S. Department of JusticeFTX founder indicted for fraud, money laundering and campaign finance offensesDecember 13, 2022
- 2U.S. Attorney, S.D.N.Y.Statement of U.S. Attorney Damian Williams on the conviction of Samuel Bankman-FriedNovember 2, 2023
- 3U.S. Attorney, S.D.N.Y.Samuel Bankman-Fried sentenced to 25 years in prisonMarch 28, 2024
- 4U.S. Securities and Exchange CommissionSEC v. Samuel Bankman-Fried, complaintDecember 13, 2022
- 5U.S. Court of Appeals, Second CircuitUnited States v. Bankman-Fried, No. 24-961 (opinion)June 12, 2026
- 6University of Notre DamePeter Easton testifies in ongoing trial of FTX founder Sam Bankman-FriedOctober 2023
- 7The Brattle GroupBrattle team supports testifying expert in the Samuel Bankman-Fried criminal fraud trial2023
- 8Bloomberg LawThe mystery of FTX’s missing $9 billion unraveled at SBF trialOctober 2023
- 9PYMNTSAccounting witness testifies Bankman-Fried treated customer billions as piggy bankOctober 18, 2023
- 10Associated Press (via Boston.com)Dethroned crypto king Sam Bankman-Fried sentenced for defrauding FTX investorsMarch 28, 2024
- 11ReutersCrypto exchange FTX’s liquidation plan receives court approvalOctober 7, 2024
- 12FTX Recovery Trust (PR Newswire)FTX announces fifth distribution of approximately $900 million to creditors on July 31, 2026July 2026
- 13Supreme Court of the United StatesDocket No. 26-349, Bankman-Fried v. United StatesAccessed November 10, 2026
- 14Legal Information Institute, Cornell Law SchoolFederal Rules of Evidence, Rule 702: Testimony by expert witnessesAmended December 1, 2023
- 15The Florida SenateFlorida Statutes §90.702, Testimony by experts2026