The judge said the sentence reflected “that there is a risk that this man will be in a position to do something very bad in the future.”
Entrepreneur Sam Bankman-Fried, founder of the failed cryptocurrency exchange FTX, has been sentenced to 25 years in prison due to a massive fraud that was triggered by the bankruptcy of FTX, one of the most popular platforms in the world for the exchange of digital currencies.
Bankman-Fried, 32, was found guilty in November fraud and conspiracya dramatic fall of the businessman and his company, which had achieved the support of celebrities such as the quarterback Tom Bradybasketball star Stephen Curry and comedian Larry David.
Judge Lewis A. Kaplan imposed the sentence Thursday in the same Manhattan courtroom where, four months ago, Bankman-Fried declared that her intention had been revolutionize the emerging marketcryptocurrencies with their innovative and altruistic ideas, do not steal.
Kaplan said the sentence reflected “that there is a risk that this man will be in a position to do something very bad in the future. And it is not a trivial risk at all.” He added that it was “for the purpose of incapacitating him to the extent that he can appropriately be done for a significant period of time.”
They accuse him of appropriating more than 9,000 million euros from his clients
Prosecutors claimed that Bankman-Fried had cost clients, investors and lenders more than 10 billion dollars (9.3 billion euros) by misappropriating billions of dollars to fuel his quest for influence and dominance in the new industry, and had illegally used FTX depositors' money to cover his expenses, which included the purchase of luxury properties in the Caribbean, alleged bribes to Chinese officials and private planes.
On Thursday, Kaplan agreed with prosecutors that Bankman-Fried should not get leniency just because some investors and clients could recover some of the lost money. He called the argument “logically flawed” and “speculative.”
Kaplan also cited three cases in which he concluded that Bankman-Fried committed perjury during his trial testimony, including when he testified that he did not know until just weeks before FTX plunged into bankruptcy that client funds were being diverted to a hedge fund arm of FTX.
When given the opportunity to speak, Bankman-Fried stood up and He apologized in a rambling statement, saying, “A lot of people feel really let down. And I'm sorry. I regret what happened every step of the way.” And he added: “My shelf life is probably over. “It ended a long time ago, before my arrest.”
He lawyer Advocate Marc Mukasey said his client had been misunderstood. “Sam was not a ruthless financial serial killer who went out every morning to hurt people,” Mukasey said. “Sam Bankman-Fried does not make malicious decisions in the heart. Make decisions with math in your head.”
A jury found that Bankman-Fried illegally used depositors' money of FTX to cover his lavish expenses, which authorities said included the purchase of luxury properties in the Caribbean, flights on private jets, excessive charitable donations and contributions to political candidates, and the payment of bribes to Chinese officials.
Prosecutors were asking for a prison sentence of between 40 and 50 years.
“The defendant victimized tens of thousands of people and companies, on several continents, over a period of multiple years. He stole money from clients who had entrusted it to him, lied to investors, sent documents fake lenders, injected millions of dollars in illegal donations into our political system and bribed foreign officials. Each of these crimes is worthy of a long sentence“, state prosecutors in a brief presented to the court.
Bankman-Fried's lawyers, friends and family had pleaded for leniency, saying it was unlikely she would return to prison. commit a crime. They also stated that FTX investors have recovered much of his fundsa claim disputed by bankruptcy attorneys, FTX and its creditors.
“Mr. Bankman-Fried continues to live a life of illusions,” wrote John Ray, the FTX CEO who has been cleaning up the bankrupt company. “The 'business' he left on November 11, 2022 was neither solvent nor secure.”
“Sam He is not the 'evil genius' described in the media nor the greedy villain described at trial,” Mukasey said, calling his client a “first-time, non-violent offender.” Bankman-Fried was worth billions of dollars on paper as co-founder and CEO. of FTX, which was the second largest cryptocurrency exchange in the world at the time.
Crypto price crash in 2022 caused FTX to crash
FTX allowed investors to buy dozens of virtual currencies, from Bitcoin to more obscure ones like Shiba Inu Coin. With billions of dollars in cash from investors, Bankman-Fried took out a Super Bowl ad to promote his business and bought the naming rights to a stadium in Miami.
But cryptocurrency price crash in 2022 took its toll on FTX and ended up causing its downfall. FTX's hedge fund subsidiary, known as Alameda Research, had purchased billions of dollars of various cryptocurrency investments that lost considerable amounts of value in 2022. Bankman-Fried sought to plug the holes in Alameda's balance sheet with funds of FTX clients.
Others three people of Bankman-Fried's inner circle declared themselves guilty of related crimes and testified at his trial. The biggest name of the three was Caroline Ellison, who was Bankman-Fried's girlfriend. Ellison described Bankman-Fried as a calculating individual who knew she was likely committing crimes when he directed the use of client funds. Two other former friends of Bankman-Fried, Gary Wang and Nishad Singh, also testified that they felt directed by Bankman-Fried to commit fraud.
