FTX Scammer Sam Bankman-Fried Gets 25 Years in Prison For Crypto Fraud

By Brian Bell  |  March 29, 2024 | 12:39pm
Image via Wikimedia Commons/Cointelegraph
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FTX Scammer Sam Bankman-Fried Gets 25 Years in Prison For Crypto Fraud
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Cryptocurrency maven turned massive fraudster Sam Bankman-Fried is going to prison for a long time.

The FTX co-founder was sentenced to 25 years in prison on Thursday after being convicted on seven counts of conspiracy and fraud in connection with the implosion of what once was the second-largest cryptocurrency exchange in the world.

“There is absolutely no doubt that Mr. Bankman-Fried’s name right now is pretty much mud around the world,” said U.S. District Judge Lewis Kaplan during the sentencing hearing.

The ruling gives some finality to a saga that saw FTX and Bankman-Fried slip from positions as figures that crypto evangelists believed would take cryptocurrency investment mainstream. The company’s now infamous Super Bowl commercial featuring Larry David and copious amounts of sportswashing sponsorships put FTX front and center as Bankman-Fried centered himself as its face publicly.

Those efforts crumbled when FTX went under, with multiple associates of Bankman-Fried testifying that the company falsified accounting records. Bankman-Fried himself shoveled billions in customer funds from FTX into his hedge fund, Alameda Research, to cover its bets on the crypto market, most of which turned sour.

Prosecutors noted during the trial that Bankman-Fried also used FTX customer funds for personal use, including buying real estate in the Caribbean and making illegal political donations. Bankman-Fried’s defense team’s claim that FTX investors had recovered most of their funds was countered by FTX CEO John Ray.

“Mr. Bankman-Fried continues to live a life of delusion,” Ray said in a victim impact statement. “The ‘business’ he left on November 11, 2022 was neither solvent nor safe. Vast sums of money were stolen by Mr. Bankman-Fried, and he was rightly convicted by a jury of his peers.”

He continued to fly in the face of the justice system during his trial, having his bail revoked after violating the terms of his release and tampering with witnesses multiple times.

Kaplan touched on the financial devastation caused by Bankman-Fried’s actions during sentencing, ordering him to forfeit $11 billion. He estimated that FTX customers lost roughly $8 billion.

Bankman-Fried’s sentence falls right in the sweet spot between what prosecutors (40-50 years) and the defense (six and a half years) requested. It is also significantly shorter than the maximum sentence of 110 years carried by the charges.

 
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