Sam Bankman-Fried, the once-celebrated founder of the now-defunct FTX crypto exchange, was sentenced to 25 years in prison. The sentence was delivered in a Manhattan courtroom by US District Judge Lewis Kaplan, who firmly dismissed Bankman-Fried’s assertions that his customers hadn’t actually suffered financial losses, and unequivocally stated that Bankman-Fried had perjured himself during his trial.
The verdict comes after a jury convicted the 32-year-old on multiple charges of fraud and conspiracy on November 2, related to the spectacular 2022 implosion of FTX, an event prosecutors have labelled as one of the largest financial deceptions in the country’s history, reported Reuters.
‘He Knew It Was Wrong’
Judge Kaplan, in his remarks, highlighted the absence of remorse from Bankman-Fried, stating, “He knew it was wrong. He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right.”
Throughout the proceedings, Bankman-Fried, donned in a plain beige T-shirt, accepted that FTX’s collapse had indeed caused suffering among its customers and extended an apology to his former colleagues, though he stopped short of admitting any legal guilt. He has signalled his intentions to challenge both his conviction and the sentence handed down to him.
During the sentencing, Bankman-Fried’s demeanour remained composed, even as the gravity of his situation became palpable. Following the pronouncement of his sentence, a brief exchange with his defence attorney, Marc Mukasey, preceded his exit from the courtroom under the escort of US Marshals.
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Fall From Grace
This sentencing underscores Bankman-Fried’s precipitous fall from grace. Once a billionaire entrepreneur revered for his acumen and philanthropy, he now stands as the most prominent figure ensnared in the crackdown on cryptocurrency malfeasance. US Attorney General Merrick Garland emphasised the broader implications of the case, warning that the justice system will hold those who seek to obfuscate their financial misdemeanours with their affluence or complexity to account.
In detailing the financial toll of Bankman-Fried’s actions, Judge Kaplan noted that FTX customers faced $8 billion in losses, while equity investors and lenders to Bankman-Fried’s hedge fund, Alameda Research, suffered losses amounting to $1.7 billion and $1.3 billion, respectively. In response, Kaplan issued an $11 billion forfeiture order, facilitating the use of seized assets to reimburse victims. The prosecution had initially sought a more severe punishment of 40 to 50 years, contrasting sharply with Mukasey’s plea for a markedly lesser sentence of no more than five years and three months.
Expressing regret over the impact of his actions, Bankman-Fried admitted to the court, “Customers have been suffering … I didn’t at all mean to minimise that. I also think that’s something that was missing from what I’ve said over the course of this process, and I’m sorry for that.”
Once A Net Worth Of $26 Billion
Before his legal troubles, Bankman-Fried had amassed a fortune by riding the surge in cryptocurrency values, at one point boasting a net worth of $26 billion. He was also a prominent political donor and an advocate for effective altruism — a philosophy urging the maximisation of one’s earnings to support philanthropic causes. However, revelations during the trial painted a picture of a man eager to cloak his political contributions and leverage them for influence, casting a shadow over his previously cultivated image of benevolence.
Bankman-Fried has been in custody at the Metropolitan Detention Center in Brooklyn since August 2023, following Judge Kaplan’s decision to revoke his bail due to probable witness tampering. The judge expressed his intention to recommend incarceration near San Francisco, closer to Bankman-Fried’s professional and personal origins.
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