The sentencing of Sam Bankman-Fried, co-founder and former CEO of FTX, comes 15 months after his arrest in the Bahamas.
The founder and former CEO of cryptocurrency exchange FTX, Sam Bankman-Fried, was sentenced on Thursday by Judge Lewis Kaplan of the United States District Court for the Southern District of New York.
After 15 months of her arrest and several days of deliberations, Judge Kaplan issued a sentence of 240 months and then 60 months consecutively for Bankman-Fried, for a total sentence of 300 months or 25 years.
According to the ruling issued by the district judge, the sentence will be served in a medium or low security prison, as the judge considered that the businessman may be vulnerable to aggression by other inmates, due to the businessman's social weaknesses and his association with great wealth.
Sam Bankman Fried He was arrested in the Bahamas in December 2022 after being charged with 8 federal crimes, including conspiracy to defraud the United States, money laundering conspiracy, wire fraud, and securities fraud, among others.
The embezzlement of funds at his companies FTX and Alameda Research resulted in multimillion-dollar losses for his clients and investors, close to $8.000 billion.
Sam Bankman-Fried knew he was committing a crime, judge ruled
In the verdict, Judge Lewis Kaplan noted that Sam Bankman-Fried was evasive and showed apparent lack of repentance for all his crimes, emphasizing that the businessman knew he was doing things wrong and was committing several crimes.
In addition to this, the judge noted that Bankman-Fried He deliberately lied, stating that it was unaware that Alameda Research was misusing FTX client funds.
Risky investments, political donations and luxury real estate
American lawyer Matthew Lee, founder of Inner City Press, shared on his social media the sentence issued by the judge on Thursday. He noted that the defense of the former FTX CEO asked the court to consider the investments made in the artificial intelligence startup Anthropic, backed by Amazon, since they will be used to pay back part of the money that was embezzled from its clients. Bankman-Fried's defense lawyers asked the judge for a sentence of 5 to 7 years in prison for the businessman.
However, the judge rejected the request, arguing that Bankman-Fried's crime was the misappropriation of his clients' funds, regardless of whether they were used “wisely, foolishly or whatever,” the judge condemned.
Sam Bankman-Fried harmed his clients, investors and lenders, by taking FTX clients' money and using it for speculative investments by Alameda and a variety of other things to which he had no right.
Several reports revealed that the former CEO of FTX used these funds to carry out More than 300 political donations, several risky investments and acquire endless amounts of luxury goods for yourself and others close to you.
After the verdict was announced, several of the investors affected by Bankman-Fried's actions expressed their dissatisfaction with the judge's verdict, saying that his political donations appear to have benefited him and that 25 years are not enough to pay for all his crimes.
According to a probation attorney's recommendations, Bankman-Fried's sentence for her crimes was 110 years, while state prosecutors were asking for 40 to 50 years in prison.
The evolution and fall of FTX
At one point, FTX was one of the largest cryptocurrency exchanges in the world, reaching a daily trading volume of billions of dollars. The company seemed to be one of the most stable in the crypto market, leading Bankman-Fried to be considered a crypto prodigy, at just 30 years old.
However, in November 2022, the company imploded after documents were leaked showing Alameda Research misusing FTX client funds. The leak of these documents caused Binance, one of the largest exchanges on the market, to sell a significant amount of FTX's FTT tokens, and many investors wanted to withdraw their funds from the platform en masse. This, in turn, led the company to have serious liquidity problems, declaring bankruptcy on November 11, 2022.
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