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Crypto Tycoon Bankman-Fried Sentenced To 25 Years In Prison Over FTX Fraud




Earlier this Thursday, March 28, 2024, titan of the crypto world, Sam Bankman-Fried, was sentenced to 25 years in prison by the Manhattan court. 32-year-old FTX founder has been charged with money laundering, campaign finance violation, and stealing customer’s money.

 

Even though federal prosecutors requested a 40-50 years sentence, saying, “This is the biggest financial crime in American history,” Judge Lewis Kaplan settled on 25 years of prison time and a forfeiture of $11 Billion. Many are comparing Sam’s crime with Berne Madoff’s 2009 Ponzi scandal. Sam’s parents Joseph and Barbara were also present during the hearing. They said in a joint statement, “ We are heartbroken. But we will fight for our son.”

 

As Lewis Kaplan passed down the judgment, he said, “ This man will be in a position to do something very bad in the future, and it’s not a trivial risk.” The judge also noted Sam’s lack of remorse and refusal to admit his crimes. Standing in a khaki prison grown, Sam said, “ Customers have been suffering. I didn't at all mean to minimize that. I also think that was missing from what I've said over the course of this process, and I'm sorry for that.”

 

Bankman-Fried also apologized to his colleagues for the mishap: "They put a lot of themselves into it, and I threw that all away. It haunts me every day.” 

 

The FTX fraud first came to light in November 2022. After an initial investigation, the owner of FTX, Sam Bankman-Fried, was arrested on Dec 12, 2022. He was convicted of stealing $8 Billion worth of customers' and investors' money. Since FTX was a private trading company, crypto traders never had the opportunity to look at the company’s balance sheet or other financial statements. Investigators confirmed that Sam was transferring FTX’s fund into Alameda Research, another company Sam was affiliated with.

 

What at first looked like an accounting error turned out to be a case of money laundering. The balance sheet indicates total liabilities of $9 Billion against $900 Million worth of assets. On January 2023, Sam Bankman was finally convicted as a fraud who used customers’ money to fund his luxury lifestyle and expensive political campaigns.

 

His lawyer, Marc Mukasey, disagrees with the prosecutor’s charges and claims “Sam was not a ruthless financial serial killer who set out every morning to hurt people. He doesn't make decisions with malice in his heart. He makes decisions with math in his head.”

 

Mukasey tried to justify Sam’s heinous fraud as clumsy decisions made by an autistic math nerd. However, Sam’s two colleagues, who were also arrested at the same time, Gary Wang and Caroline Ellison, has confirmed that it was not a mismanagement issue. According to their statement, Sam knew what he was doing. For now, judge Kaplan has recommended a medium-security correction facility for Sam near San Fransisco; where he will spend the next 25 years of his life. 

 

FTX started its journey in 2019 and soon dominated the cryptocurrency world. It was the most used cryptocurrency exchange and was valued at $32 Billion by Forbes. It all came crashing down in November 2022 after the price of Bitcoin decreased slowly. And Sam was found guilty of trying to manipulate the price of FTT, a special type of digital wallet. The U.S. district court initially ordered Sam Bankman to be in home detention. But soon, he was taken to a detention center in Brooklyn after he tried to intimidate the key witnesses of the case.

 

 

 

 

 

 

 

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