Sam Bankman-Fried was sentenced to 25 years in federal prison.
The verdict of the founder of the FTX crypto exchange, which collapsed in 2022, is based on accusations of his involvement in defrauding customers and investors. The decision on the imprisonment of Sam Bankman-Fried was issued by a Manhattan court on Thursday, March 28.
Judge Lewis Kaplan said before the verdict was announced that there was a risk that the FTX founder would be able to do something very bad. It was also noted separately that the corresponding risk is not trivial.
Lewis Kaplan agreed with the prosecutor’s office’s statement that Sam Bankman-Fried wanted to be an extremely influential functionary in the political system of the United States. In this context, law enforcement officers also stated that the mentioned purpose was the reason for the commission of financial crimes.
It is worth noting that a prison sentence of 25 years is about half what the prosecutors insisted on. However, the Manhattan court’s ruling still provides for one of the longest prison terms in the history of high-profile investigations into fraudulent activities committed by so-called white-collar workers.
It is worth mentioning that Bernard Madoff was sentenced to 150 years in prison for a $20 billion Ponzi scheme. He died about 12 years after starting his stay in prison. Theranos founder and CEO Elizabeth Holmes has been convicted on four charges of defrauding investors for some features of the management practices of a failed startup. She was sentenced to just over 11 years in prison.
Lewis Kaplan, in addition to the prison order, also ordered the confiscation of $11.2 billion. He stated that there would be no restitution, since in this case, it was an impractical solution, given the number of victims of fraud.
Lewis Kaplan also recommended that Sam Bankman-Freed serve his sentence in a medium- or lower-security facility located as close to San Francisco as possible so that the FTX founder’s family could visit him.
Over the past year and a half, the former billionaire has become a kind of living symbol of greed and malfeasance in the sphere of cryptocurrencies. After the collapse of FTX, a multi-year fraud was exposed that swindled about $10 billion from customers. Sam Bankman-Fried denied that the illegal practice was a deliberate act. According to him, FTX became a victim of market downturns in 2022.
Lewis Kaplan dismissed Sam Bankman-Fried’s 20-minute statement. The judge argues that there is no sincere remorse in this case.
Sam Bankman-Fried has already announced his intention to appeal the conviction. It is worth noting that he has the legal right to challenge the court’s decision.
Prosecutors said Sam Bankman-Fried transferred billions of dollars from FTX to the affiliated hedge fund Alameda Research to spend the money on speculative investments, expensive real estate, and more than 300 political donations. In 2022, against the background of market volatility, crypto exchange creditors began to demand their funds. Sam Bankman-Fried used customer money to meet this requirement.
As we have reported earlier, FTX Lawyers Recover Billions and Bill Millions Investigating Exchange Reboot.
Serhii Mikhailov
Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.
