The former star of the cryptocurrency world, Sam Bankman-Fried, was sentenced on Thursday, March 28, to 25 years in prison for having stolen $8 billion that belonged to clients of the cryptocurrency exchange platform FTX, the company he co-founded. . The convicted person, who intends to appeal the decision, will have to repay more than $11 billion. However, several victims criticize the sentence, which, according to them, is not enough.
The former “king” of cryptocurrencies knows his punishment. Sam Bankman-Fried, co-founder of the cryptocurrency exchange platform FTX, was sentenced to 25 years in prison by a New York court on Thursday, March 28. The 32-year-old was found guilty of having stolen $8 billion belonging to the platform's clients, one of the largest financial frauds in recent history.
Sam Bankman-Fried had already been found guilty by a jury panel in November of the seven charges against him. The New York prosecutor, Damian Williams, had requested between 40 and 50 years in prison against the financial businessman.
Federal Judge Lewis Kaplan, who handled the case, found that FTX clients lost $8 billion in the scam. Additionally, FTX equity investors lost 1.7 billion and other creditors lost 1.3 billion. Thus, the judge ordered Sam Bankman-Fried to repay $11 billion to the victims.
During the hearing, Judge Lewis Kaplan criticized the stance of “SBF,” Sam Bankman-Fried's nickname, stating that the defendant showed no remorse and lied in court. For his part, the convicted person intends to appeal the decision.
“I knew it was wrong,” Judge Kaplan declared. “He knew it was a crime. He regrets making a very bad bet on the likelihood of getting caught. But he's not going to admit anything, as is his right,” he added.
The convicted man apologized, but did not convince the court
For his part, Sam Bankman-Fried apologized and admitted that he had “made a series of bad decisions.” “Many people feel that we have scammed them, and we have scammed them, I'm sorry,” the convicted man confessed.
Faced with the threat of a very harsh sentence, Sam Bankman-Fried's lawyers tried to present the young financier as a more human person than the manipulative man described during the trial. “Those who know Sam know that he is selfless and altruistic,” his lawyers wrote in a document submitted to Judge Kaplan before the hearing.
Read alsoWhat is known about Sam Bankman-Fried, the young man behind one of the biggest cryptocurrency frauds?
People who have known him “understand that his conduct has never been motivated by greed or a desire for prestige,” his lawyers wrote, citing one of the testimonies.
However, this line of defense did not convince the court, which considered it had enough evidence to prove the central role played by “SBF” in the fraud. “Defrauding customers and investors has serious consequences,” said US Attorney General Merrick Garland in a statement.
“Anyone who believes they can hide their financial crimes behind wealth and power, or behind some shiny new thing that they claim no one else is smart enough to understand, should think twice,” the prosecutor insisted.
The fall of the “wunderkind” of the financial world 2.0
Born in 1992 into a wealthy family, Sam Bankman-Fried graduated in physics with a minor in mathematics from the prestigious Massachusetts Institute of Technology (MIT) in 2014, the year he began working in the financial world.
His first steps in the cryptocurrency business were taken in 2017, with the Alameda Research foundation, which later became the investment arm of the FTX cryptocurrency exchange platform, created two years later.
Quickly, the young and charismatic businessman gained the trust of investors. In a short time, FTX became the second most important cryptocurrency platform in the world, until it was valued at around $32 billion.
However, the success did not last long. At the end of 2022, Changpeng Zhao, CEO of Binance, the world's largest cryptocurrency exchange, sold his stake in FTX and expressed concern about the financial stability of the platform.
The Binance director's decision produced a domino effect: investors and clients began to worry and request withdrawals of their assets on the platform. The mass panic movement sank FTX, which suffered a deficit of about 8 billion. A few months later, he declared bankruptcy.
The FTX bankruptcy revealed the functioning of the platform and the true intentions of Sam Bankman-Fried. In reality, “SBF” used the assets of the platform's clients to carry out risky transactions through the sister company Alameda, buy private properties or, among other expenses, make donations to political parties.
The victims asked for larger sentences against “SBF”
Some victims expressed frustration at the end of the trial, believing the sentences were too light relative to the scale of the scam implemented by Sam Bankman-Fried.
“25 years is a joke,” a member of an FTX creditor group with the username Bruno Dixon wrote on the messaging app Telegram. Another member of the same Telegram group, who goes by the name Steven, said the sentence was “laughable for such a serious crime.”
Others also made reference to the case of Bernard Madoff, who was sentenced to 150 years in prison in 2009, after being found guilty of a pyramid scheme estimated at $65 billion, one of the most famous in history.
It is estimated that more than one million customers suffered losses as a result of the FTX collapse in November 2022. Victims say they are still owed more than $19 billion, based on current cryptocurrency prices.
With EFE, AFP and Reuters.
