On March 28, the founder of FTX cryptocurrency exchange, Sam Bankman-Fried, was sentenced to 25 years in prison for defrauding customers of $8 billion and had to pay $11 billion in compensation to victims.
The collapse of the FTX cryptocurrency exchange in 2022 was called by US prosecutors one of the largest financial frauds in the country’s history. The judge rejected Bankman-Fried’s defense saying that FTX customers “did not actually lose money”.
“Samuel Bankman-Fried orchestrated one of the largest financial frauds known in history,” said Manhattan attorney Damian Williams.
“Curly” Sam was sentenced to 25 years in prison and had to pay 11 billion USD in compensation. Photo: Reuters
Meanwhile, Attorney General Merrick Garland affirmed that “no one can hide financial crimes behind the appearance of wealth and power.” Both Bankman-Fried’s parents are law professors at Stanford.
Three close associates of Bankman-Fried testified as witnesses that the e-marketplace boss directed them to use customer money to cover losses for the Alameda Research fund. Previously, three people pleaded guilty to fraud.
The founder of FTX admitted that customers of the electronic trading platform had to “suffer”, and apologized to former colleagues at FTX, but did not admit wrongdoing. Bankman-Fried’s family said they will continue to appeal.
According to the verdict, FTX traders lost $8 billion, the exchange’s equity investors lost $1.7 billion, and those who lent to the Alameda Research hedge fund (founded by Bankman-Fried) damage of 1.3 billion USD. The court sentenced 11 billion USD to be forfeited and authorized the government to return assets to the victims.
Bankman-Fried reached the pinnacle of wealth and fame when he was less than 30 years old. According to Forbes magazine, this former Massachusetts Institute of Technology graduate has a net worth of more than $26 billion, thanks to the boom in Bitcoin and other digital assets.
Court records show that Bankman-Fried also intended to use the money to buy political influence, as one of the largest financial contributors to Democratic candidates ahead of the 2022 midterm elections. No Just that, the founder of FTX also donated to the Republican Party through “straw” donors.
(Theo Reuters)