For a long time he was considered the crypto king and appeared with celebrities – then his platform FTX collapsed in 2022. Now Sam Bankman-Fried has to go to prison for 25 years. The public prosecutor’s office had accused him of “unsurpassed greed.”
Former cryptocurrency entrepreneur Sam Bankman-Fried sentenced to 25 years in prison after being convicted of fraud. This sentence was imposed by a court in New York. The founder of the bankrupt cryptocurrency platform FTX was accused of embezzling billions of dollars in customer funds.
The 32-year-old founder of the cryptocurrency exchange FTX was found guilty by a jury last November. FTX, one of the largest trading venues for crypto assets such as Bitcoin, collapsed spectacularly at the end of 2022. Bankman-Fried was arrested in the Bahamas and extradited to the United States.
Bankman-Fried also had a hedge fund called Alameda Research that made risky trades and borrowed funds from FTX. Actually, collateral should have been deposited for such transactions. There were also computer systems that were supposed to take care of this. But this software made a secret exception for Alameda. This allowed the hedge fund to go as deep as it wanted on FTX. But the Alameda deals went wrong – and there was a billion-dollar hole in the FTX coffers.
Prosecutors: “Unsurpassed greed”
Celebrities like football star Tom Brady promoted FTX, Bankman-Fried spoke at conferences about the future of the financial system, donated a lot of money to the Democratic Party and was photographed at the Super Bowl with singer Katy Perry and actor Orlando Bloom.
Bankman-Fried said in court that he had only a partial understanding of his companies’ financial situation. However, prosecutors accused him of “unsurpassed greed” and emphasized that given the “historic” dimension of the crime, the sentence should be appropriately high – 40 to 50 years. This should also “promote respect for the law”.
The defense, however, had pleaded for a good five to six and a half years in prison. Your client is by no means the “super villain” described by the prosecution. They also pointed out that FTX customers received a large portion of their money back. Judge Kaplan did not accept this argument. “A thief who brings his loot to Las Vegas and successfully bets with the stolen money is not entitled to any relief from his sentence by using his Las Vegas winnings to repay the stolen money.”