Sam Bankman-Fried of FTX declared bankruptcy and sentenced to 25 years in prison

In exactly one year, Sam Bankman-Fried went from being a highly respected boss of a multi-billion dollar company, or even a savior of cryptocurrencies, to that of a criminal. On November 2, 2022, the media CoinDesk published the article which would lead to the fall of the cryptocurrency exchange platform FTX, which was then the second largest in the world.

On November 3, 2023, after a highly publicized trial, Sam Bankman-Fried was found guilty of 7 counts, including fraud, criminal conspiracy and money laundering. On March 28, 2024, several months after the conclusions of the trial, the fallen boss, often nicknamed SBF, finally received his prison sentence: he was sentenced to 25 years in prison.

A relatively heavy sentence

The sentence was handed down in the New York court, where Sam Bankman-Fried's trial took place. It was Judge Lewis Kaplan, who presided over the trial, who also announced the sentence: a total of 300 months, or 25 years in prison. “ The punishment must be adapted to the seriousness of the crime “, explained the judge, “ and it is a very serious crime “.

In his discord, the judge also described Bankman-Fried as a man “ extremely intelligent “, ” exceptionally ambitious “, ” aware of his talents ”, but also a man “ ready to toss the existence of life on earth. » The sentence announced by the judge is, however, relatively lenient.

Sam Bankman-Fried could face up to 115 years in prison, which would have been one of the longest sentences for a financial crime ever handed down in the United States, after the Bernie Madoff affair. The New York prosecutor demanded a sentence of between 50 and 60 years in prison, and SBF's lawyers, a very light sentence of 6 years in prison. The latter believed that Bankruptcy victims could indeed regain part of their funds.

The spectacular bankruptcy of FTX

FTX's bankruptcy occurred in just a few days. In November 2022 CoinDesk published an article questioning the financial health of FTX and Alameda Research, an investment fund specializing in cryptocurrencies also founded by SBF. Despite SBF's attempts to reassure customers and investors of the good health of companies, notably by declaring on Twitter that ” funds were safe and sound “, fear sets in. But that is not enough: in 3 days, withdrawal requests reached the equivalent of 6 billion dollars. Sam Bankman-Fried resigns from his position and FTX files for bankruptcy immediately, on November 11, 2022.

Suspicion quickly turns to the former boss. It quickly becomes apparent that the company was not just the victim of a bank run, and that Sam Bankman-Fried made more management errors: many clients' funds disappeared. He was indicted in December 2022 by a New York court for “ wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering “.

During the investigation which followed and in which the former associates of SBF participated, it was shown that the former boss would have disguised the accounts of FTX. Above all, he would have developed a system allowing Alameda Research to use client funds deposited on FT, and to spend them. The two companies allegedly lost their customers $8 billion.