Former FTX founder sentenced to 25 years in prison for fraud

Sam Bankman-Fried’s crypto adventures cost investors, lenders, and customers $11 billion.

Sam Bankman-Fried, the founder and CEO of the crypto exchange FTX, now faces a 25-year prison sentence for his role in fraudulent activities.

His downfall began after the company collapsed in November 2022, resulting in a staggering loss of $11 billion.

New York District Court Judge Lewis Kaplan, presiding over the case, ordered Bankman-Fried to forfeit the entire amount. This decision came after an assessment revealing that FTX’s customers suffered an $8 billion loss, while investors and lenders faced losses of $1.7 billion and $1.3 billion, respectively.

Bankman-Fried's conviction, stemming from seven counts including wire fraud, conspiracy, commodities fraud, and money laundering, culminated in a severe sentence, despite prosecutors initially seeking an even longer prison term – between 40 and 50 years. Judge Kaplan, however, expressed concern over the potential for further misconduct by Bankman-Fried, prompting a recommendation for medium-security imprisonment, US media reported.

The defense attempted to mitigate the sentence by promising restitution of all money, and pointed to their client’s remorse for his actions, but the court dismissed this as misleading and speculative. Moreover, the judge highlighted instances of perjury and witness tampering committed by Bankman-Fried during the trial.

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The former billionaire’s journey from a quant at Jane Street Capital to the management of the world’s second largest crypto exchange ended abruptly in 2022 when CoinDesk revealed the financial irregularities at Alameda Research, his trading firm. It turned out that he had diverted funds from FTX to support Alameda Research, forging the financial reports to hide the fraud.

Before the fall, FTX was valued at $24 billion.

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