Federal District Court Judge for the Southern District of New York, Lewis Kaplan, sentenced Sam Bankman-Fried, the former head of the FTX cryptocurrency exchange and Alameda Research fund, to 25 years in prison and also ordered the confiscation of $11 billion. USA.
We remind you that in 2022, when FTX just collapsed, we devoted a large article to the origins of what was happening. We also note that in November 2023, Sam Bankman-Freed pleaded guilty to all charges, of which there were many.
Advertisement
Previously, Bankman-Fried and his lawyers asked The court sentenced him to 63 to 78 months in prison (5.25 to 6.5 years in prison), arguing that he deserved leniency because of his “charitable activities and demonstrated dedication to other people” and the concept of “effective altruism.”
In turn, the prosecution asked the judge send Bankman-Fried to prison for a term of 40 to 50 years, although the maximum penalty was up to 110 years in prison. Prosecutors said the former FTX chief should be “imposed a sentence that highlights the extraordinary nature of the harm done to thousands of victims, discourages the defendant from committing further fraud, and sends a powerful message to others who may be tempted to commit financial crimes.”
“There is a significant likelihood that if the defendant is released back into society at a young enough age, he will have a new opportunity to commit further fraud,” prosecutors wrote. “He has already proven that he knows how to create a favorable public image for himself, and his own presentation of the sentence demonstrates that he is already trying to portray his crimes as simple mistakes and misunderstandings.”
As a result, the judge sentenced the ex-FTX executive to 25 years in prison, three more years of supervised release after that, and also ordered the confiscation of $11 billion, but did not order restitution “due to the complexity of the case and the number of victims,” says a protocol of a meeting. Instead, Judge Lewis Kaplan authorized US authorities to compensate victims using confiscated assets.
In his speech, Kaplan noted that there is a significant risk that SBF “could do something very bad in the future.” Also, according to him, Bankman-Fried never showed any remorse, although he “knew perfectly well that he had done wrong.”
Advertisement
The judge concluded that FTX clients lost $8 billion, investors lost another $1.7 billion, and creditors of Bankman-Fried's Alameda Research fund lost $1.3 billion. At the same time, he rejected Bankman-Fried’s arguments that all funds would be returned to clients during the company’s bankruptcy process.
“Defendant's assertion that FTX's customers and creditors will be paid in full is misleading, logically flawed and speculative,” Caplan is quoted as saying. Reuters. “A thief who brings his loot to Las Vegas and makes a successful bet with the stolen money is not eligible for a reduced sentence, even if he uses his winnings in Las Vegas to pay off the stolen goods.”
The fact is that after the charges were filed, SBF repeatedly stated that FTX was solvent and would be able to cover all debts to the victims. John Jay Ray III, current CEO of FTX and a renowned crisis specialist who is overseeing the company's liquidation, assertsthat this is not at all true.
“Bankman-Fried stubbornly continues to live in delusions. “I can assure the court that his statements are categorically, absolutely and demonstrably false,” John Ray wrote. “Even the best possible outcome will not achieve true, complete economic recovery for all creditors and non-insider investors as if the fraud never happened.”
According to the expert, at the time of taking over FTX, the company had only 105 BTC left against almost 100,000 BTC owed to clients.
“Why did the bitcoins disappear? The jury concluded that Mr. Bankman-Fried stole them and converted them into other items, Ray said. “For this reason, they cannot be returned to the victims unchanged.”
It's also worth noting that the court recommended that Bankman-Fried be sent to a minimum security facility because “his fame, association with extreme wealth, autism and social awkwardness may make him vulnerable to a maximum security facility.”
According to the publication The Washington Post, one of SBF's lawyers, Marc Mukasey, said during the hearing that “in the financial world, Sam was not a ruthless serial who went out every morning to hurt people.” According to him, Sam Bankman-Fried did not make decisions “with malice in his heart, but relied only on the mathematics in his head.”
The former head of FTX himself addressed the court after his lawyer spoke: “I regret what happened at every stage. There are things I should have done and there are things I shouldn’t have done,” he said. According to him, together with his partners, they “built something beautiful at FTX,” and he “ruined it all.” Bankman-Fried also said that the collapse of FTX would haunt him every day of his life.