FTX crypto exchange founder Bankman-Fried handed 25 years for fraud
Mar 30, 2024
New York [US], March 30: Former cryptocurrency entrepreneur Sam Bankman-Fried, who was convicted of fraud, has been sentenced to 25 years in prison.
New York judge Lewis Kaplan announced his decision on Thursday, US media reported from the courtroom. Lawyers for the 32-year-old founder of cryptocurrency exchange FTX have been considering an appeal since his conviction in November.
Kaplan's sentence fell between the expectations of the prosecution, which had requested 40 to 50 years in prison, and the defence, which had proposed around six years in prison.
If Kaplan had utilized the proposed sentences for all charges, Bankman-Fried would have faced more than 100 years in prison. FTX, one of the largest trading centres for cryptocurrencies such as Bitcoin, collapsed spectacularly at the end of 2022. Bankman-Fried was detained in the Bahamas and extradited to the US.
While the cryptocurrency business can be complicated, Bankman-Fried was ultimately charged with classic fraud: Embezzlement of client assets. Bankman-Fried was also behind a hedge fund called Alameda Research, which made risky transactions and borrowed funds from FTX when collateral should in fact have been deposited.
There were also computer systems that were supposed to take care of this, but the software made a secret exception for Alameda, which allowed the hedge fund to go as far into the red as it wanted with FTX. When the Alameda trades went wrong, there was a multibillion-dollar hole in FTX's coffers.
During the trial, Bankman-Fried said that he only partially understood the financial situation of his companies, but former allies at FTX and Alameda accused him of urging them to violate the law. The prosecutors accused Bankman-Fried of unrivalled greed and emphasized that, given the historic dimension of the crime, the sentence should be appropriately high, which should also promote respect for the law.
The prosecutors also accused Bankman-Fried of repeatedly lying under oath in court. The judge found the same, which increased the potential sentence to up to 110 years.
Bankman-Fried was wearing a prison uniform in court. The 32-year-old's lawyers pointed out, among other things, that Bankman-Fried had been diagnosed with autism. They also emphasized that some of FTX and Alameda's investments had performed well, which could compensate many investors. (DPA)
Source: Qatar Tribune
