On Thursday, Sam Bankman Fried walked into a Manhattan courtroom to conclude his criminal trial, hoping to receive only a few years in prison for charges related to the cryptocurrency exchange collapse.
Instead, Judge Lewis Kaplan opted for a harsher punishment, sentencing the 32-year-old to 25 years in prison.
“The sentence must properly reflect the seriousness of the crime, and this was a very serious crime,” Kaplan said.
Once one of the most powerful figures in the high-flying cryptocurrency industry, Bankman Fried's astonishing rise and fall has captivated the public, with the FTX founder going from billionaire prodigy to prison inmate seemingly overnight. Became. His case also served as a referendum on a turbulent sector that entered a bear market with the collapse of FTX.
Thursday's verdict marks the end of this saga, but Bankman Freed's lawyers said they will appeal the conviction.
fall from grace
Bankman Fried became the face of the last crypto bull market, with his tousled hair appearing on billboards and advertisements. FTX, which he founded in 2019, has attracted high-profile investors such as Sequoia Capital and Singapore sovereign wealth fund Temasek, and has grown to a valuation of more than $30 billion. Mr. Bankman-Fried has also become a top advocate for the industry, frequently appearing in Washington, D.C., by plane from his home base of the Bahamas, urging lawmakers to regulate it.
Despite his rapid success, the unusual structure of FTX and its affiliated trading company Alameda Research has raised red flags, with crypto exchange CoinDesk announcing in November 2022 that Alameda will launch the company's proprietary crypto token. The company released a balance sheet showing that it is overly dependent on FTT. . That month, the entire operation collapsed.
As Bankman Freed scrambles to rebuild his empire, details emerge of how FTX funneled customer deposits to Alameda to fill holes left by disastrous deals and exorbitant spending on real estate and startup investments. Ta. At the request of U.S. authorities, Bahamian authorities arrested Bankman-Freed in December 2022 and extradited him to the United States later that month, where he was indicted by the Department of Justice on charges including fraud and conspiracy.
Once proceedings began, Bankman-Fried was granted bail and allowed to live with his parents in Palo Alto, California, an arrangement that Kaplan, who oversaw the case, reported to Bankman-Freed in a document published by police. The company collapsed after discovering that it had been leaked. new york times. The former CEO of FTX has been held since August at the Metropolitan Detention Center, a Brooklyn facility notorious for its squalid conditions.
Bankman Fried's jury trial begins in early October, with Justice Department prosecutors and defense attorneys weighing in on whether the collapse resulted from intentional fraud or whether things simply got out of hand. They were fighting over each other. For nearly a month, many of Mr. Bankman Freed's inner circle, including his ex-girlfriend and Alameda CEO Caroline Ellison, have taken a stand, saying they understand the crimes Mr. He described himself as if he were a founder. On November 2, a 12-person jury sided with prosecutors and found Bankman Freed guilty on all seven charges. The Justice Department decided not to proceed with the second trial, which could have brought additional charges such as campaign finance violations.
sentencing
Bankman Fried had been sentenced to more than 100 years in prison, but both prosecutors and his defense team had asked for a more lenient sentence, with the prosecution asking for 40 to 50 years. The team had asked for a sentence of no more than six and a half years.
The defense's argument centers on recovering most of the funds lost as part of FTX's bankruptcy, with the recent rise in cryptocurrency prices and the unraveling of Empire's corporate network, making it clear that, at least as of 2019, the foundation It was said that there was a high possibility that the customers could be repaid. Crypto asset prices at the time of the crash.
“Sam Bankman Freed is a “sociopath,'' “a man with no morals, conscience, or empathy,'' and “an icy manipulator, a bully, and a shameless liar.'' ’,” the lawyers said in a written statement. Recommendation to Kaplan. “They don't know the real Sam Bankman Freed.”
Prosecutors and the FTX Bankruptcy Foundation disagreed, arguing that Bankman Fried should receive a sentence “commensurate with the extraordinary scale of the crime.”
During Thursday's sentencing, Bankman Fried sat at the defense table wearing prison uniform, with two guards sitting behind him. Speaking before Mr. Kaplan, he expressed regret for the loss to customers, but denied any crimes he was convicted of and insisted he had enough assets to fully repay FTX users. .
“It haunts me every day,” Bankman-Fried said. “It was excruciating to watch this all unfold in slow motion.”
Assistant U.S. Attorney Nicholas Luce disputed Bankman Fried's statements, saying the bankruptcy was not the result of mismanagement or a liquidity crisis. “It was theft,” Ruth said.
Kaplan noted Bankman-Fried's lack of remorse and said the sentence should reflect the crime committed, but disagreed with prosecutors' original recommendation of 40 to 50 years in prison. He said he sentenced Bankman-Fried to 25 years in prison and recommended that he be sent to prison. He was moved to a medium-security prison in the San Francisco Bay Area so his parents could visit him more easily.
Bankman Freed has 14 days to appeal.
