- Sam Bankman-Fried, co-founder of the now-defunct cryptocurrency exchange FTX, received a 25-year jail term after being found guilty of defrauding investors and consumers of his bankrupt company.
- Bankman-Fried’s defence sought a maximum of 6.5 years, contrasting sharply with the prosecution’s call for up to 50 years, but Judge Kaplan’s sentence ultimately aligned with neither.
- Prior to its collapse, FTX, led by Sam Bankman-Fried, emerged as one of the largest cryptocurrency exchanges globally, attracting millions of users and generating substantial revenues.
OUR TAKE
FTX co-founder Sam Bankman-Fried’s sentencing to a 25-year jail term for fraud casts a spotlight on the intricate legal battle surrounding the once-prominent cryptocurrency exchange. The sentence not only highlights the downfall of a former “crypto king”, but also underscores the necessity for accountability and regulation in the industry. The divergent perspectives presented during the trial, with the defence advocating for leniency while the prosecution sought maximum penalties, underscore the complex ethical and legal considerations surrounding cryptocurrency-related offences. Moreover, the outcome of this high-profile case is poised to influence future legal precedents, shaping the trajectory of the industry as it grapples with issues of transparency, investor protection, and regulatory compliance.
–-Sylvia Shen, BTW Reporter
Sam Bankman-Fried, a co-founder of the defunct cryptocurrency exchange FTX, was found guilty of cheating investors and consumers of his now-bankrupt company and received a 25-year jail term.
The downfall of Sam Bankman-Fried
In response to his conviction on seven charges, Bankman-Fried was sentenced on March 28 by Judge Lewis Kaplan of the United States District Court of New York to 240 months and 60 months, for a total of 25 years.
Bankman-Fried was the first individual connected to Alameda Research and FTX to be sentenced to jail after the exchange collapsed in November 2022.
Also read: Sam Bankman-Fried sentencing: Faces 50 years, hopes for 5
Bankman-Fried expresses regret
Before pronouncing the sentence on Thursday, Judge Lewis Kaplan offered a scathing critique of Bankman-Fried’s actions. He highlighted that during the trial, Bankman-Fried claimed he was unaware until the last minute that his companies were diverting funds entrusted to them by customers for other purposes, which the judge deemed as false testimony.
Bankman-Fried said he was “sorry about what happened at every stage,” stating FTX could have endured if not for its closure.
His lawyers portrayed him as a misunderstood genius in their closing statement: “Sam was not a ruthless financial serial killer. He wasn’t predatory. He makes decisions with math in his head, not malice in his heart.”
Judge Kaplan’s sentence fell between the recommendations put forth by Bankman-Fried’s attorneys and the prosecutors. The defence proposed a maximum of 6.5 years, while the prosecution argued for up to 50 years.
Also read: Sam Bankman-Fried seeks 5 years, shares crypto advice with guards
FTX’s legacy
Before it collapsed, FTX was among the biggest cryptocurrency exchanges in the world, making Bankman-Fried a household name in the business world and drawing millions of users who bought and traded cryptocurrencies on the site.
FTX garnered millions of customers. Bankman-Fried testified that the company’s revenue surged from $10 million in 2019 to $20 million in 2020, then to $80 million in 2021, finally reaching $1 billion in 2022. In 2021, FTX’s daily revenue peaked at $3 million.
