25 years in prison for crypto fraudster Sam Bankman-Fried – Economy

The founder of the crypto exchange FTX will spend the coming decades behind bars. In the multibillion-dollar fraud trial against Sam Bankman-Fried, Judge Lewis Kaplan set the sentence at 25 years on Thursday after a jury found the 32-year-old guilty in November.

The public prosecutor’s office had requested 40 to 50 years in prison, Bankman-Fried’s lawyers suggested around six years in prison. Among other things, they pointed out that a large proportion of investors could be compensated by monetizing former FTX investments.

FTX, one of the largest Cryptocurrency trading venues such as Bitcoin collapsed spectacularly at the end of 2022. Bankman-Fried was arrested in the Bahamas and extradited to the United States. The jury found Bankman-Fried guilty in November on all seven counts, including fraud, conspiracy and money laundering. He is said to have embezzled eight to ten billion dollars in customer money in order to speculate and finance his extravagant lifestyle. Under his leadership, FTX customer assets were secretly pumped into a hedge fund. When these deals went wrong, FTX was left with a billion dollar hole.

Bankman-Fried’s well-paid self-promotion

After studying physics at MIT in Boston, Bankman-Fried took a job as a trader at Jane Street Capital on Wall Street. In 2017 he set up his own brokerage firm Alameda and in 2019 founded the crypto exchange FTX, which quickly became the most important trading platform for Bitcoin and other Cryptocurrencies and was most recently valued at $32 billion. Bankman-Fried also took care of the image: He paid A-list celebrities such as football star Tom Brady, actor Larry David and basketball player Steph Curry to advertise FTX.

Bankman-Fried marketed himself as an extraordinary billionaire: He tried to earn as much as possible as quickly as possible so that some of it could later be donated to charity. He lived with his employees in a palatial penthouse in the Bahamas, where he was arrested in November 2022. In exchange for bail of $250 million, he was allowed to live under house arrest at his parents’ estate in California, but then had to go to prison in August because he was said to have tried to tamper with witnesses.

Three of his former friends and colleagues weighed heavily on him during the trial, including his former partner, Alameda CEO Caroline Ellison, FTX co-founder Gary Wang and chief technology officer Nishad Singh. All three had pleaded guilty and testified against Bankman-Fried.

Bankman-Fried tried in court to portray FTX’s collapse as the unfortunate result of faulty accounting. At some point he no longer understood the finances of his companies, he said, and admitted mistakes in the company’s management. However, that did not convince the nine women and three men on the jury.