April 17, 2024

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FTX founder, Sam Bankman Freed, sentenced to 25 years in prison

FTX founder, Sam Bankman Freed, sentenced to 25 years in prison

NEW YORK (AP) — Cryptocurrency entrepreneur Sam Bankman Fried He was sentenced Thursday to 25 years in prison for a massive fraud on hundreds of thousands of customers that collapsed with the collapse of FTX, once one of the world's most popular platforms for cryptocurrency exchanges.

U.S. District Judge Louis A. Kaplan delivered a scathing analysis of Bankman-Fried and his crimes before announcing the sentence, which was half of what prosecutors demanded and less than a quarter of the 105 years recommended by court probation officers.

“There's little doubt that Mr. Bankman Fried is now pretty much the muck all over the world.”, which the judge ordered him to confiscate.

He was He was convicted in November of fraud and conspiracy — a dramatic fall from the pinnacle of success that included a Super Bowl ad and celebrity endorsements from stars like quarterback Tom Brady, basketball star Stephen Curry and comedian Larry David.

Kaplan imposed the sentence in the same Manhattan courtroom where, four months earlier, Bankman-Fried testified that he intended to revolutionize the emerging cryptocurrency market with his innovative and altruistic ideas, not theft. The judge said Bankman-Fried repeatedly committed perjury when he told lies from the witness stand.

Kaplan said the sentence reflects “that there is a risk that this man will be in a position to do something very bad in the future. It is not a trivial risk at all.” He added that this was “for the purpose of disabling it to the extent that it can be done appropriately for an extended period of time.”

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Kaplan said he would advise the Federal Bureau of Prisons to send Bankman-Fried to a medium-security prison near San Francisco because his notoriety, connection to vast fortunes, and his autism and social awkwardness would likely make him particularly vulnerable in high-risk circumstances. Security facility.

It was recommended by Assistant U.S. Attorney Nicholas Ross Imprisonment 40 to 50 years, saying it was the only way to ensure the defendant “would never do this again.”

“The defendant harmed tens of thousands of people and companies, across multiple continents, over several years. He stole money from clients who entrusted it to him; he lied to investors. he sent fabricated documents to lenders; he funneled millions of dollars in illegal donations into our system.” political, and bribed foreign officials. Prosecutors said in a court filing that each of these crimes deserves a long sentence.

Prosecutors said Bankman-Fried embezzled billions of dollars to support his quest for influence and dominance in the new industry, and had Funds used illegally From FTX depositors to cover his expenses, which included the purchase of luxury real estate in the Caribbean, bribes to Chinese officials and private jets.

Kaplan agreed with prosecutors Thursday that Bankman Fried should not get leniency simply because some investors and clients might recover some of their losses. He pointed out that customers lost about $8 billion, investors lost $1.7 billion, and lenders were exposed to short selling of $1.3 billion.

Given the opportunity to speak, Bankman-Fried stood up and apologized in a rambling statement, saying: “A lot of people are feeling really let down. They've been very let down. And I'm sorry for that. I'm sorry for what happened at every stage.”

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He added: “My useful life may be over. It ended a while ago, before my arrest.”

Bankman Freed, wearing a khaki prison uniform and shackled at the ankles, appeared to become briefly emotional as he spoke for about 20 minutes, expressing regret about “a lot of mistakes” but shifting some of the blame to others. His messy, thick hair was back from the rambunctious look he had shown at the trial.

The judge later criticized those statements, saying that he “never expressed remorse for committing terrible crimes.”

Defense lawyer Mark Mukasey said his client was misunderstood.

“Sam was not a ruthless serial financial killer who set out every morning to hurt people,” Mukasey said. “Sam Bankman Fried doesn't make decisions with malice in his heart. He makes decisions with math in his head.”

Bankman Fried's attorney, friends and family He urged leniencySaying he was unlikely to commit the crime again. They also said FTX investors largely got their money back — a claim disputed by bankruptcy lawyers for FTX and its creditors.

“Bankman Fried continues to live a life of delusion,” wrote Mr. John Ray, the CEO of FTX who was cleaning up the bankrupt company. “The ‘business’ he left on November 11, 2022 was neither solvent nor safe.”

Two weeks ago, Mukasey attacked the Probation Office's recommendation of 105 years in prison, saying that a sentence of that length would be “ugly” and “barbaric.”

He urged the judge to sentence Bankman-Fried to five to six-and-a-half years in prison, which Mukasey said was a fair reading of federal sentencing guidelines.

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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 one time.

FTX allowed investors to purchase dozens of virtual currencies, from Bitcoin to more obscure currencies like the Shiba Inu Coin. With billions of dollars in investor money pouring in, Bankman-Fried ran a Super Bowl ad to promote his company and bought the naming rights to an arena in Miami.

but Cryptocurrency price collapse In 2022, it negatively affected FTX, and eventually led to its downfall. FTX's hedge fund firm, known as Alameda Research, bought billions of dollars in various cryptocurrency investments that lost significant amounts of value in 2022. Bankman-Fried attempted to plug holes in Alameda's balance sheet with FTX clients' money.

Three other people from Bankman-Fried's inner circle pleaded guilty to related crimes and testified at his trial.

The biggest name of the three was Caroline Ellison, who was once Bankman-Fried's girlfriend. Ellison Bankman described Fried as someone who calculated that he knew he was likely to commit crimes when he was directing the use of clients' funds. Two other friends of Bankman Fried, Gary Wang and Nishad Singh, also testified that they felt Bankman Fried directed them to commit fraud.