Sam Bankman-Fried, the founder of FTX cryptocurrency exchange, has been sentenced to 25 years in prison for orchestrating a massive fraud scheme. The sentencing came after a jury found him guilty on seven counts of fraud and conspiracy related to the collapse of FTX in 2022.
US District Judge Lewis Kaplan handed down the sentence, rejecting Bankman-Fried’s claims that customers did not lose money and accusing him of lying during the trial. Bankman-Fried, once a billionaire and major political donor, faced the judge as he received the sentence, wearing a beige jail t-shirt.
The judge stated that FTX customers lost $8 billion, while equity investors and lenders also suffered significant losses. Despite Bankman-Fried’s assertion that customers and creditors would be repaid, the judge deemed it misleading and speculative.
Prosecutors had sought a much longer sentence, emphasizing the massive scale of the criminality involved. They argued that Bankman-Fried knowingly directed the misuse of customer funds to cover losses at his hedge fund, Alameda Research.
Bankman-Fried, in his defense, admitted to mistakes but denied intent to defraud. He portrayed himself as an “awkward math nerd” who worked to rectify the situation post-collapse.
The downfall of Bankman-Fried, once celebrated for his wealth and philanthropy, marks a significant event in the US crackdown on cryptocurrency malfeasance. His net worth had soared to $26 billion by the age of 30, riding the wave of bitcoin’s popularity.
While Bankman-Fried’s parents, both Stanford University law professors, attended the hearing, several FTX customers expressed disappointment over the compensation process, which is based on the cryptocurrency’s value at the time of bankruptcy.
Bankman-Fried has been detained since August 2023 after his bail was revoked due to concerns over witness tampering. He plans to appeal both his conviction and sentence, indicating that the legal battle is far from over.
Comments