Sam Bankman-Fried was sentenced to 25 years in prison by a judge on Thursday for stealing $8 billion (approximately Rs 66,678 crore) from customers of the now-bankrupt FTX cryptocurrency exchange he founded. The final step in the dramatic downfall of a millionaire prodigy.
U.S. District Judge Lewis Kaplan rejected Bankman-Fried’s claims during a Manhattan court hearing that FTX clients did not actually lose money and found that he lied in his trial testimony. He lied and the verdict was passed. A jury on Nov. 2 found Bankman-Fried, 32, guilty of seven counts of fraud and conspiracy stemming from FTX’s 2022 collapse, which prosecutors said was the U.S. One of the largest financial frauds in history.
Kaplan said Bankman-Fried showed no remorse.
“He knew it was wrong,” Kaplan said. “He knew it was a crime. He regrets that he made a very bad bet on the possibility of being arrested. But he will not admit anything and that is his right.”
In a 20-minute speech to the judge, Bankman-Fried, who was wearing a beige short-sleeved prison T-shirt, acknowledged losses suffered by FTX clients and apologized to his former FTX colleagues, but did not admit criminal wrongdoing.
He vowed to appeal against his conviction and sentence.
Bankman-Fried stood with her hands clasped as Kaplan read the words. He then spoke briefly with defense attorney Mark Mukasey before leaving the courtroom led by members of the U.S. Marshals Service.
The sentence marked Bankman-Fried’s fall from status as an ultra-wealthy entrepreneur and major political donor to the biggest trophy yet for U.S. authorities in their crackdown on cryptocurrency market malfeasance.
“Deceiving customers and investors has serious consequences,” U.S. Attorney General Merrick Garland said in a statement. “Anyone who thinks they can hide their financial crimes behind wealth and power, or behind what they claim to be The people behind shiny new things that no one is smart enough to understand should think twice before using them.”
Kaplan found that FTX clients lost $8 billion, equity investors in FTX lost $1.7 billion (roughly Rs. 14,169 crore), and lenders to the Bankman-Fried-founded Alameda Research hedge fund lost $1.3 billion (roughly Rs. 10,835 crore). billion rupees). He issued a confiscation order of $11 billion (about Rs 91,682 crore) and authorized the government to repay victims with seized assets.
Federal prosecutors sought a prison sentence of 40 to 50 years. Mukasey argued for a sentence of less than 5-1/4 years.
“I’m sorry about that”
Bankman-Fried told the judge: “Customers have been suffering… It was not my intention to downplay that at all. I also think that was missed in what I said throughout this process and I’m sorry for that. .”
Of his FTX colleagues, Bankman-Fried added, “They put a lot of effort into it and I threw it all away. That bothers me every day.”
Three former close associates testified as prosecution witnesses that Bankman-Fried directed them to use FTX client funds to cover Alameda Research’s losses. All three pleaded guilty to fraud.
Kaplan said Bankman-Fried lied during his testimony, saying he did not know Alameda Research had spent customer deposits withdrawn from FTX.
Mukasey sought to distance Bankman-Fried from notorious fraudsters like Bernie Madoff, saying he was “not a ruthless financial serial killer” but a “clumsy math nerd,” Trying to get customers’ money back after FTX collapsed.
“Sam Bankman Fried does not make decisions with bad intentions,” Mukasey added. “He uses the math in his head to make decisions.”
As Mukasey spoke, Bankman-Fried’s eyes turned red and he appeared to be holding back tears.
His parents, Stanford University law professors Joseph Bankman and Barbara Fried, attended the sentencing. Bankman held a green umbrella and they embraced each other as they walked out of the courthouse into a rainy New York afternoon.
“We are heartbroken and will continue to fight for our son,” they said in a statement.
“Power and influence”
According to Forbes magazine, Bankman-Fried, a graduate of MIT, had a net worth of $26 billion (approx. 2,16,705 crore).
Bankman-Fried is known for her tousled curly hair and commitment to the Effective Altruism movement, which encourages talented young people to focus on making money and donating it to worthy causes.
He is one of the biggest contributors to Democratic candidates and causes ahead of the 2022 U.S. midterm elections. Kaplan noted that trial evidence showed Bankman-Fried also gave money to the Republican Party through “straw” donors to conceal his involvement.
The judge called Bankman-Fried’s conduct of presenting herself as a “good guy” an act, adding, “The goal was power and influence.”
Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn since August 2023, when Kaplan revoked his bail after finding he may have tampered with witnesses on at least two occasions. Kaplan said he would recommend sending Bankman-Fried to a prison near San Francisco.
© Thomson Reuters 2024
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