By KEN SWEET and LARRY NEUMEISTER (Associated Press)
In New York, the former crypto tycoon Sam Bankman-Fried faces a lengthy prison term for his involvement in the 2022 downfall of FTX, a previously highly popular digital currency trading platform.
32-year-old Bankman-Fried was found guilty in November of committing fraud and conspiracy, marking a significant decline from the prior year when he and his companies appeared to be experiencing great success, even securing a Super Bowl ad and endorsements from celebrities such as quarterback Tom Brady and comedian Larry David.
A jury determined that Bankman-Fried unlawfully used FTX depositors' money for his own lavish expenses, including purchasing luxury properties in the Caribbean, allegedly paying off Chinese officials, and acquiring private planes.
Prosecutors suggested a prison term ranging from 40 to 50 years.
In a court filing, prosecutors informed Judge Lewis A. Kaplan, saying, “The defendant victimized tens of thousands of people and companies, across several continents, over a period of multiple years. He stole money from customers who entrusted it to him; he lied to investors; he sent fabricated documents to lenders; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials. Each of these crimes is worthy of a lengthy sentence.”
Bankman-Fried's legal team, as well as his friends and family, have requested leniency, asserting that he is not likely to repeat his actions. They also claimed that FTX's investors have mostly recovered their funds, although this assertion is disputed by bankruptcy attorneys, FTX, and its creditors.
“Mr. Bankman-Fried continues to live a life of delusion,” wrote John Ray, the CEO of FTX who has been cleaning up the bankrupt company. “The ‘business’ he left on November 11, 2022 was neither solvent nor safe.”
A couple of weeks ago, Bankman-Fried's lawyer Marc Mukasey criticized the probation office's recommendation of a 100-year sentence, deeming it “grotesque” and “barbaric.” He urged the judge to consider a term of five to 6 1/2 years in prison.
Mukasey stated,“Sam is not the ‘evil genius’ depicted in the media or the greedy villain described at trial,” adding that his client is a “first-time, non-violent offender.”
Bankman-Fried, the co-founder and CEO of FTX, was once worth billions on paper and his company was the second-largest cryptocurrency exchange in the world at one point.
FTX enabled investors to trade numerous virtual currencies, from popular ones like Bitcoin to lesser-known ones such as Shiba Inu Coin. With billions of investors’ money at his disposal, Bankman-Fried even ran a Super Bowl ad to promote his business and purchased the naming rights to an arena in Miami.
However, the decline in cryptocurrency prices in 2022 had a negative impact on FTX, leading to its demise. FTX's hedge fund affiliate, Alameda Research, had made investments in various cryptocurrencies worth billions of dollars, resulting in substantial losses in 2022. Bankman-Fried attempted to cover these losses with FTX customer funds.
Three more people who were close to Bankman-Fried admitted to similar crimes and gave evidence at his trial.
The most well-known of the three was Caroline Ellison, who used to date Bankman-Fried. Ellison said that Bankman-Fried was a calculating person who knew he was likely breaking the law when he instructed the use of customer funds. Two other former friends of Bankman-Fried, Gary Wang and Nishad Singh, also said they felt Bankman-Fried told them to commit fraud.
Former cryptocurrency tycoon Sam Bankman-Fried could be sentenced to decades in prison for his involvement in the 2022 collapse of FTX, which was once one of the most popular platforms for trading digital currency. Bankman-Fried, 32, was found guilty in […]
