The founder of FTX, a trading platform for cryptocurrency, Sam Bankman-Fried has officially been sentenced to 25 years in prison for his fraud and embezzlement crimes.
FTX
Created in 2019 to trade cryptocurrency. Customers could open accounts to trade and buy cryptocurrency and then convert this into real cash which they could withdraw into their bank accounts
The Crimes
Late 2022 the company went bankrupt after billions of dollars of customers’ money had been lost due to fraud. The company went bankrupt and millions of customers were locked out of their accounts unable to withdraw their money. Some had lost their life savings.
Customers lost in total around $8bn as well as investors losing roughly, $1.7bn.
FTX shareholders are extremely unlikely to see their money returned and this includes, Tiger Global Management, the Ontario teacher’s pension plan, Sequia Capital as well as the New England Patriots owner Robert Kraft and NFL quarterback, Tom Brady and Ex-wife, Gisele Bundchen who advertised for FTX.
Their stakes were at one point valued at tens of millions and now are worthless.
The hedge fund, Alameda Research was supposedly holding $11.3bn but according to accounting experts present at the trial, only $2.3bn of this could be found.
In November 2023 Sam Bankman-Fried was convicted of 7 charges of wire fraud and conspiracy.
Sam Bankman-Fried had been living lavishly with colleagues using the money for their own personal lives and gains.
The Trial
Prosecutors demanded a 40-50 year sentence for Sam Bankman-Fried arguing that the crimes could be repeated as well as a need to deter other from similar acts.
Bankman-Fried’s lawyers asked for a 6 year sentence arguing that this was his first offence and he was non-violent, as well as the promise that customers would be paid back in full.
This latter claim was rejected by the judge as “illogical” and “Speculative”. The current CEO of FTX also rejected this as the amount of money lost could not be paid back by the company.
Today, the Judge agreed on a 25 year sentence for Sam Bankman-Fried.
