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Bankman-Fried sentenced to 25 years in prison for FTX fraud | The Express Tribune

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Sam Bankman-Fried was sentenced Thursday to 25 years in prison by a judge for stealing $8 billion from customers of the now-bankrupt FTX cryptocurrency exchange he founded, the latest step in the dramatic fall of the former billionaire prodigy.

U.S. District Judge Lewis Kaplan handed down the sentence during a Manhattan court hearing after rejecting Bankman-Fried’s assertion that FTX customers did not actually lose money and accusing him of for lying during his testimony at trial. A jury found Bankman-Fried, 32, guilty Nov. 2 of seven counts of fraud and conspiracy stemming from FTX’s 2022 collapse, in what prosecutors called one of the largest financial frauds in United States history.

Kaplan said Bankman-Fried showed no remorse.

Learn more: Crypto exchange FTX to sell shares in AI startup Anthropic

“He knew it was wrong,” Kaplan said of Bankman-Fried before handing down the sentence. “He knew it was criminal. He regrets having made a very bad bet on the probability of getting caught. But he is not going to admit anything, as is his right.”

Bankman-Fried stood with his hands clasped in front of him as Kaplan read the sentence. He was led out of the courtroom by members of the US Marshals Service at the end of the hearing.

Bankman-Fried, wearing a short-sleeved beige T-shirt, acknowledged during 20 minutes of remarks to the judge that FTX customers had suffered and he apologized to his former FTX colleagues.

The sentence marks the culmination of Bankman-Fried’s fall from ultra-wealthy entrepreneur and major political donor to the biggest trophy to date in the U.S. crackdown on corporate wrongdoing. cryptocurrency markets. Bankman-Fried has vowed to appeal his conviction and sentence.

Kaplan said he found that FTX customers lost $8 billion, investors in FTX stock lost $1.7 billion and lenders to the Alameda Research hedge fund, founded by Bankman -Fried, had lost $1.3 billion.

“Defendant’s assertion that FTX’s customers and creditors will be paid in full is misleading, logically flawed, and speculative,” Kaplan said. “A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a reduced sentence by using his winnings in Las Vegas to repay what he stole.”

The judge also said Bankman-Fried lied during his trial testimony by claiming he did not know his hedge fund had spent customer deposits from FTX.

Federal prosecutors had sought a prison sentence of 40 to 50 years. Bankman-Fried’s lawyer, Marc Mukasey, had argued that a sentence of less than 5 1/4 years would be appropriate.

Addressing the judge, Bankman-Fried said: “The customers suffered…I didn’t want to minimize that at all. I also think that’s something that was missing in what I said during this process, and I’m sorry for that.”

Referring to his colleagues at FTX, Bankman-Fried told the judge: “They put a lot of themselves into this, and I threw it all away. It haunts me every day.”

Three of his former close associates testified as prosecution witnesses at trial that he directed them to use FTX client funds to cover losses at Alameda Research.

” In large scale “

Nicolas Roos, a prosecutor in the U.S. attorney’s office in Manhattan, told the judge: “Crime here is massive. She was omnipresent in every aspect of the business. »

During the hearing, Mukasey sought to distance his client from notorious fraudsters like Bernie Madoff.

“Sam was not a ruthless financial serial killer who set out every morning to hurt people,” Mukasey said, describing his client as a “math clumsy nerd” who worked hard to recover clients’ money after the collapse of FTX.

“Sam Bankman-Fried does not make decisions with malice in his heart,” Mukasey added. “He makes decisions with math in mind.”

Bankman-Fried testified in his own defense that he made mistakes, including failing to establish a risk management team, but denied intending to defraud anyone or steal the customer money.

His parents, Joseph Bankman and Barbara Fried, law professors at Stanford University, attended the sentencing.

A graduate of the Massachusetts Institute of Technology, Bankman-Fried experienced a boom in the value of bitcoin and other digital assets to reach a net worth of $26 billion, according to Forbes magazine, before he turned 30.

Bankman-Fried became known for his mop of shaggy curly hair and his commitment to a movement known as Effective Altruism, which encourages talented young people to focus on making money and giving it away to good causes. He has also been one of the largest contributors to Democratic candidates and political causes ahead of the 2022 US midterm elections.

But prosecutors said the responsible image he cultivated concealed his years of embezzlement from clients.

Bankman-Fried has been held at the Metropolitan Detention Center in Brooklyn since August 2023, when Kaplan revoked his bail after it was discovered he had likely tampered with witnesses at least twice.

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