FTX founder Sam Bankman-Fried, on Thursday, was sentenced to 25 years of prison by U.S. District Judge Lewis Kaplan for what prosecutors called “one of the largest financial frauds in US history.”
The sentence that was given in Manhattan Federal Court was shorter than the sentence that federal prosecutors had requested.
Kaplan said Bankman-Fried has shown no remorse, reports Reuter.
“He knew it was wrong,” Kaplan says. “He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right.”
Further, the judge ordered the convicted founder to pay $11B in forfeiture to the U.S. government.
The prosecutors had sought a sentence ranging from 40 to 50 years, as the defendant was found guilty on a total of seven charges related to fraud, conspiracy, and money laundering.
These charges carried a maximum penalty of 110 years behind bars.
However, the punishment was still significant, considering it was far above the 6.5 years that the defense lawyers had requested for their client.
During a 20-minute speech to the judge, Bankman-Fried expressed regret that FTX customers had suffered but did not admit any criminal wrongdoing, adds Reuter.
Bankman-Fried says, “Customers have been suffering … I didn’t at all mean to minimize that. I also think that’s something that was missing from what I’ve said throughout this process, and I’m sorry for that.”
Further, he has vowed to appeal his conviction and sentence.
Close associates testified
On the other hand, SBF’s three former associates testified saying he directed them to use FTX customer funds to plug losses at Alameda Research. All three have pleaded guilty to fraud.
They are:
- Caroline Ellison, the Alameda Research CEO
- FTX engineering chief Nishad Singh
- Gary Wang, the co-founder and chief technology officer of FTX.
The district judge ruled that Bankman-Fried gave false testimony when he denied knowing that Alameda Research used FTX customer deposits.
Consequently, Mr. Bankman-Fried will likely be sent to a low or medium-security prison close to his family’s home in the San Francisco Bay Area, according to the judge. He is currently being held at the Metropolitan Detention Center in Brooklyn.
“We are heartbroken and will continue to fight for our son,” says his parents, Stanford University law professors Joseph Bankman and Barbara Fried, in a statement.
Sam Bankman-Fried meme-coin pump and dump
A few hours before Bankman-Fried’s sentencing, a developer launched a memecoin named Sam Baseman Fraud using FTX ticker, on Coinbase’s layer-2 network Base.
In just seven hours, the FTX memecoin rallied more than 23,300%, with market capitalisation peaking at $1.5 million on March 28.
At the time of writing this article, the market capitalisation of $FTX stands at $334K, according to dexscreener.
Currently, the value of the memecoin stands at $0.003508.
Brief flashback
The collapse of FTX began when CoinDesk, a news site that specialises in bitcoin and digital currencies, revealed that FTX’s corporate sibling, Alameda Research, which had $14B in assets, was too heavily reliant on illiquid tokens, including FTX’s own FTT.
Consequently, Sam Bankman Fried stepped down as CEO following a massive liquidity crisis. In addition, the FTX CEO has been accused of accessing customer funds improperly for this trading firm Alameda Research.
In December 2022, Sam Bankman Fried was arrested in The Bahamas after being criminally charged by US prosecutors.
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