Sam Bankman-Fried, the founder of the infamous FTX crypto exchange has just been sentenced to 25 years in prison.
(PLGNN) - Sam Bankman-Fried, 32, has just been sentenced to 25 years for his role in defrauding users of the collapsed crypto exchange FTX. Sam Bankman-Fried, also known as SBF, founded FTX in 2019, and FTX eventually became the third largest exchange in the world during the crypto boom. At its peak, FTX was once valued at over $30 billion, giving SBF an estimated $20 billion dollar net worth. Bankman-Fried used this net worth for many charitable endeavors, and notably donated heavily to United States President Joe Biden's 2020 presidential campaign, becoming the second largest donor.
However, in 2022, FTX sister hedge fund Alameda Research, which was also founded by SBF, had a leaked balance sheet that revealed Alameda Research was taking FTX customer funds. When investors went to withdraw their holdings of FTX's currency, it revealed an $8 billion dollar gap in what FTX owned and could pay out. This caused it to become apparent how closely intertwined Alameda Research and FTX really were.
After all this was revealed, SBF was arrested by US authorities at his multi-million dollar Bahamas penthouse. Bankman-Fried's trial was in November, and involved jarring testimonies from his inner circle, including ex-girlfriend Caroline Ellison, Gary Wang, and Nishad Singh.
Bankman-Fried was convicted on all seven criminal count against him including two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit securities fraud, conspiracy to commit commodities fraud, and conspiracy to commit money laundering. SBF was sent to Metropolitan Detention Center in Brooklyn, where he had been held since August. In February, crypto crime journalist Tiffany Fong released images of Sam Bankman-Fried in MDC, posing alongside gang members. One of those gang members was Bloods member G Lock, who told Fong that Bankman-Friend is "a good guy. Weird as s–t, can be strange. But he is a good guy." G Lock also mentioned that when he met SBF, SBF “had a belly, he was eating good. [Now] he’s skinny like a toothpick.”
United States Prosecutors were seeking for SBF to get as much as 50 years, however SBF's legal team were arguing for Bankman-Fried to only get six and a half years. U.S. District Judge Lewis Kaplan decided to sentence Bankman-Fried to 25 years in prison.d
Bankman-Fried's parents issued a statement outside of the courtroom, stating, "We are heartbroken and will continue to fight for our son."
It is unlikely that SBF's co-conspirators Caroline Ellison, Gary Wang, and Nishad Singh will face any jail time.
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| Sam Bankman-Fried In Court, Image From CNN |
(PLGNN) - Sam Bankman-Fried, 32, has just been sentenced to 25 years for his role in defrauding users of the collapsed crypto exchange FTX. Sam Bankman-Fried, also known as SBF, founded FTX in 2019, and FTX eventually became the third largest exchange in the world during the crypto boom. At its peak, FTX was once valued at over $30 billion, giving SBF an estimated $20 billion dollar net worth. Bankman-Fried used this net worth for many charitable endeavors, and notably donated heavily to United States President Joe Biden's 2020 presidential campaign, becoming the second largest donor.
However, in 2022, FTX sister hedge fund Alameda Research, which was also founded by SBF, had a leaked balance sheet that revealed Alameda Research was taking FTX customer funds. When investors went to withdraw their holdings of FTX's currency, it revealed an $8 billion dollar gap in what FTX owned and could pay out. This caused it to become apparent how closely intertwined Alameda Research and FTX really were.
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| This chart shows the complicated network between FTX and Alameda Research |
After all this was revealed, SBF was arrested by US authorities at his multi-million dollar Bahamas penthouse. Bankman-Fried's trial was in November, and involved jarring testimonies from his inner circle, including ex-girlfriend Caroline Ellison, Gary Wang, and Nishad Singh.
Bankman-Fried was convicted on all seven criminal count against him including two counts of wire fraud, two counts of conspiracy to commit wire fraud, conspiracy to commit securities fraud, conspiracy to commit commodities fraud, and conspiracy to commit money laundering. SBF was sent to Metropolitan Detention Center in Brooklyn, where he had been held since August. In February, crypto crime journalist Tiffany Fong released images of Sam Bankman-Fried in MDC, posing alongside gang members. One of those gang members was Bloods member G Lock, who told Fong that Bankman-Friend is "a good guy. Weird as s–t, can be strange. But he is a good guy." G Lock also mentioned that when he met SBF, SBF “had a belly, he was eating good. [Now] he’s skinny like a toothpick.”
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| Image from @TiffanyFong_ on X (formerly Twitter) |
United States Prosecutors were seeking for SBF to get as much as 50 years, however SBF's legal team were arguing for Bankman-Fried to only get six and a half years. U.S. District Judge Lewis Kaplan decided to sentence Bankman-Fried to 25 years in prison.d
Kaplan weighed many things in his decision, such as SBF's neurodiversity, charity work, young age, and this being his first offense. Kaplan also said that this did not diminish the harm wrought be his crimes. According to Tiffany Fong, Kaplan also weighted things mentioned in Caroline Ellison's testimony, such as Sam Bankman-Fried willing to take a coin flip that has a 50-50 chance of either ending the world or doubling human advancement. This risk tolerance is why Kaplan opted for a longer sentence, to reduce the chance of Bankman-Fried committing crimes again. According to Vox, "Prosecutors argued that the losses in the case are enormous, conservatively estimated at $8 billion for FTX customers, $1.7 billion for FTX investors, and $1.3 billion for Alameda lenders."
Bankman-Fried's legal team argued that due to the recent crypto surge, customer losses should be calculated at zero, as customers have actually made more. However, prosecutors argued that any potential recovery of funds after FTX filed for bankruptcy shouldn’t be considered in the sentencing decision. Judge Kaplan agreed with this, stating that "A fortuitous run-up in the value of some cryptocurrencies bears no relation to the gravity of the crimes that were committed. A thief who takes his loot to Las Vegas and successfully bets is not entitled to a sentencing reduction."
On Tuesday, Prosecutors had filed documents from victims describing how SBF's actions had harmed them. According to NBC News, one man wrote “My whole life has been destroyed, I have 2 young children, one born right before the collapse. I still remember the weeks following where I would stare blankly into their eyes, completely empty inside knowing their futures have been stolen through no fault of our own. I did not gamble on crypto. I did not make any crypto gains. I had my [bitcoin] which I had collected over years deposited on FTX as a custodian. I did not agree to the risk that SBF took with my funds.” The man also added that he had been suffering from depression and his wife became suicidal.
In the courthouse, Bankman-Friend stated in an apologetic tone that he had mades and a series of "selfish" decisions while leading FTX and "threw it all away" along with saying that it "haunts me everyday".
There is no possibility of parole in federal criminal cases, however Sam Bankman-Fried could potentially serve as little as 12.5 years, if he gets all of the jailhouse credit available to him. According to CNN, federal prisoners generally can earn up to 54 days of time credit a year for good behavior, which could result in an approximately 15% reduction. However, since 2018, nonviolent federal inmates can reduce their sentence by as much as 50% under prison reform legislation known as the First Step Act.
Judge Kaplan is recommending a medium security prison in the San Francisco Bay Area, that way Bankman-Fried can be visited by his parents. Kaplan also ordered a forfeiture of $11.02 billion to repay victims of FTX.
Bankman-Fried's legal team argued that due to the recent crypto surge, customer losses should be calculated at zero, as customers have actually made more. However, prosecutors argued that any potential recovery of funds after FTX filed for bankruptcy shouldn’t be considered in the sentencing decision. Judge Kaplan agreed with this, stating that "A fortuitous run-up in the value of some cryptocurrencies bears no relation to the gravity of the crimes that were committed. A thief who takes his loot to Las Vegas and successfully bets is not entitled to a sentencing reduction."
On Tuesday, Prosecutors had filed documents from victims describing how SBF's actions had harmed them. According to NBC News, one man wrote “My whole life has been destroyed, I have 2 young children, one born right before the collapse. I still remember the weeks following where I would stare blankly into their eyes, completely empty inside knowing their futures have been stolen through no fault of our own. I did not gamble on crypto. I did not make any crypto gains. I had my [bitcoin] which I had collected over years deposited on FTX as a custodian. I did not agree to the risk that SBF took with my funds.” The man also added that he had been suffering from depression and his wife became suicidal.
In the courthouse, Bankman-Friend stated in an apologetic tone that he had mades and a series of "selfish" decisions while leading FTX and "threw it all away" along with saying that it "haunts me everyday".
There is no possibility of parole in federal criminal cases, however Sam Bankman-Fried could potentially serve as little as 12.5 years, if he gets all of the jailhouse credit available to him. According to CNN, federal prisoners generally can earn up to 54 days of time credit a year for good behavior, which could result in an approximately 15% reduction. However, since 2018, nonviolent federal inmates can reduce their sentence by as much as 50% under prison reform legislation known as the First Step Act.
Judge Kaplan is recommending a medium security prison in the San Francisco Bay Area, that way Bankman-Fried can be visited by his parents. Kaplan also ordered a forfeiture of $11.02 billion to repay victims of FTX.
Bankman-Fried's parents issued a statement outside of the courtroom, stating, "We are heartbroken and will continue to fight for our son."
It is unlikely that SBF's co-conspirators Caroline Ellison, Gary Wang, and Nishad Singh will face any jail time.
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