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Embattled founder of cryptocurrency exchange platform, FTX, Sam Bankman-Fried has been sentenced to 25 years in prison by a judge today for stealing $8 billion from customers. 
A New York District Judge, Lewis Kaplan handed down the sentence at a Manhattan <a href="https://www.reuters.com/technology/sam-bankman-fried-be-sentenced-multi-billion-dollar-ftx-fraud-2024-03-28/" target="_blank" rel="noreferrer noopener">court hearing</a> after rejecting Bankman-Fried’s claim that FTX customers did not lose money. The judge also accused him of lying during his trial testimony. Recall that the 32-year-old former CEO was <a href="https://technext24.com/2023/11/03/sbf-guilty-ftx-fraud-users-funds-experts/" target="_blank" rel="noreferrer noopener">found guilty</a> by a jury in November on seven counts of fraud and conspiracy which led to FTX’s 2022 collapse. 
SBF was found guilty of two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy and one count of money laundering conspiracy.&nbsp; 
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 Bankman-Fried acknowledged during 20 minutes of remarks to the judge that FTX customers had suffered and he offered an apology to his former FTX colleagues.
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“He knew it was wrong. He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right”, Reuters reported Judge Kaplan to have said of Bankman-Fried before handing down the sentence. 
Judge Kaplan also said that FTX customers lost $8 billion, FTX’s equity investors lost $1.7 billion, and lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion. “The defendant’s assertion that FTX customers and creditors will be paid in full is misleading, it is logically flawed, it is speculative,” Judge Kaplan said. 
Furthermore, the judge also said that Bankman-Fried lied during his trial testimony when he said he did not know that his hedge fund had spent customer deposits taken from FTX. justifying the sentence, the judge berated the former CEO for his attitude following FTX’s collapse: 
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 <img loading="lazy" decoding="async" width="1080" height="720" src="https://technext24.com/wp-content/uploads/2024/03/sam.jpeg" alt="Former FTX Chief Executive Sam Bankman-Frie" class="wp-image-229439">
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 Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, leaves the Manhattan federal court in New York City, U.S. March 30, 2023. REUTERS/Amanda Perobelli
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“A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back what he stole”, he said. 
Federal prosecutors had sought a prison sentence of&nbsp;<a href="https://www.reuters.com/legal/sam-bankman-fried-deserves-40-50-years-prison-ftx-fraud-prosecutors-say-2024-03-15/" target="_blank" rel="noopener">40 to 50</a>&nbsp;years. His crimes each carry a maximum sentence of between five and 20 years in prison with the wire fraud, wire fraud conspiracy and money laundering conspiracy carrying a maximum 20-year sentence. Bankman-Fried’s defense lawyer Marc Mukasey had argued that a sentence of less than 5-1/4 years would be appropriate. Bankman-Fried has vowed to appeal his conviction and sentence. 
The sentence marked the culmination of Bankman-Fried’s plunge from an ultra-wealthy entrepreneur and major political donor to the biggest trial, so far, in a crackdown by U.S. authorities on malfeasance in cryptocurrency markets. 
<h5 id="the-trial-of-sam-bankman-fried-a-backstory" class="wp-block-heading">The trial of Sam Bankman-Fried: a backstory</h5> 
A Massachusetts Institute of Technology graduate, Bankman-Fried rode a boom in the values of Bitcoin and other digital assets to a net worth of $26 billion, according to Forbes magazine, before he turned 30. 
<a href="https://claims.ftx.com/" target="_blank" rel="noreferrer noopener">FTX</a>&nbsp;and its subsidiaries, which are now headed by new management headed by restructuring chief and CEO John Ray, filed for Chapter 11 bankruptcy on November 11, 2022, recovering charitable donations, misappropriated funds, and fraudulent payments have been paramount. The company has since been aggressively pursuing legal means to recover customer funds. 
For instance, the company filed a&nbsp;<a href="https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MTYzMzg1OQ==&amp;id2=-1" target="_blank" rel="noreferrer noopener">suit</a>&nbsp;to return $71.6 million in allegedly commingled corporate and customer funds related to investments and donations to life sciences companies. The suit claims that the FTX Foundation and Latona donated funds to six life sciences companies for the personal benefit of SBF and Rheingans-Yoo and without any benefit to Alameda Research or FTX.&nbsp; 
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 FTX CEO, Sam Bankman-Fried
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FTX also claimed in the suit that the former executives breached their fiduciary duties by allegedly misappropriating customer funds on a “continuous basis to finance luxury condominiums, political and ‘charitable’ contributions, speculative investments and other pet projects.” 
The suit further noted that the former executives issued more than $725 million worth of equity to themselves “without [debtors] receiving any value in exchange”, and SBF and Wang misappropriated an additional $546 million to purchase shares in the trading platform Robinhood. 
It was also alleged that Ellison paid herself $28.8 million in bonuses and used $10 million to purchase a stake in an artificial intelligence company.&nbsp; 
SBF, too on January 24, 2022, transferred $10 million as a “gift” from his FTX US account to his father’s account on the same exchange, and shortly after that, SBF’s father made six transfers totalling $6.75 million to his accounts at Morgan Stanley and TD Ameritrade. 
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 <img loading="lazy" decoding="async" width="720" height="480" src="https://technext24.com/wp-content/uploads/2022/12/sbf.jpeg" alt="Sam Bankman-Fried lands in the US for trials" class="wp-image-173033">
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 FTX founder, Sam Bankman-Fried arriving in court in Nassau, Bahamas on December 21, 2022. Photo: Kris INGRAHAM / AFP Source: AFP 
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The court filing asserted that the “gift” is currently being used to fund SBF’s legal defence and many of the alleged fraudulent transfers occurred while the exchange was insolvent.] 
Some months after, Sam Bankman-Fried was <a href="https://www.reuters.com/breakingviews/sbfs-guilty-verdict-will-help-crypto-break-free-2023-11-03/" target="_blank" rel="noreferrer noopener">found guilty</a> of all seven charges of fraud by a jury in his criminal trial in New York. SBF was found guilty of two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy and one count of money laundering conspiracy. 
Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn since August 2023, when Kaplan revoked his bail after finding he likely tampered with witnesses at least twice.

Breaking: Sam Bankman-Fried sentenced to 25 years for $8bn theft

Technext.ng

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