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Sam Bankman-Fried a.k.a SBF, the founder and former CEO of defunct crypto exchange FTX, has received a sentence of 300 months or 25 years in total, with 240 months initially and an additional 60 months consecutively.
The sentencing hearing unfolded on the 26th story of the federal courthouse in downtown Manhattan, where just months prior, a jury unanimously convicted the former crypto executive on all seven criminal charges.
Pre-Sentencing Statements
Prior to the sentencing, Judge Lewis. A. Kaplan found Bankman-Fried guilty of perjury during his trial testimony, stating that the disgraced former crypto mogul falsely claimed ignorance of Alameda’s use of FTX customer deposits before 2022.
The judge also concluded that Bankman-Fried engaged in witness tampering by communicating with the former FTX general counsel before being remanded into custody. Judge Kaplan rejected the defense’s argument concerning loss, both legally and factually. He dismissed the defense’s assertion that customers and creditors would be fully reimbursed, deeming it misleading as it equated loss solely with the dollar volume in the bankruptcy case.
According to updates from Matthew Lee, the founder of a non-profit organization, Inner City Press, Judge Kaplan’s figures, investors lost $1.7 billion to investors, Alameda lenders lost $1.3 billion to Alameda lenders, and FTX customers lost a staggering $8 billion.
While addressing the court directly, Bankman-Fried issued an apology, but state prosecutor Nicolas Roos presented a contrasting view, asserting that FTX was founded on “pervasive criminality.”
Similarly, Judge Kaplan viewed the proceedings as a “performance.” While acknowledging Bankman-Fried’s refusal to admit guilt, the judge recognized his persistence and “marketing” skills and agreed with Roos that Bankman-Fried’s narrative was evident, pointing out his ability to continue promoting his story to the media despite legal proceedings.
Post FTX Collapse
FTX’s collapse in early November 2022 was triggered after a CoinDesk bombshell report that revealed that its sister trading firm, Alameda Research, heavily relied on speculative crypto tokens for its valuation. Concerns over the dubious financial practice, in addition to the close relationship between FTX and Alameda, led to a surge of customer withdrawals, leading both entities into bankruptcy.
This event rattled the already volatile crypto market, causing losses of billions. A month later, the US government filed civil and criminal charges against the former CEO and other top executives for misappropriating over $8 billion in customer deposits, fabricating financial statements, and orchestrating an insolvency.
Bankman-Fried was then extradited from The Bahamas to the U.S., tried in October 2023, and convicted in November 2023 on criminal charges, except for one dropped charge in July 2023.
