FTX Founder Sam Bankman-Fried Gets His Sentence For Massive Cryptocurrency Fraud
Sam Bankman-Fried, the founder and chief of doomed cryptocurrency exchange FTX, has been handed a 25-year federal prison term for defrauding investors and customers to the tune of $8 billion. One of the biggest frauds of its kind in recent times, the former crypto prince was lambasted for not only misleading and misappropriating funds but also for lying during his testimony by U.S. District Judge Lewis Kaplan.
"The collapse of FTX haunts me every day," Bankman-Fried was quoted saying by CNBC during the sentencing that took place at Manhattan Federal Court. He was first charged and found guilty of fraud back in November last year, concluding the meteoric rise of a young entrepreneur and a catastrophic downfall following an exposé of hidden ties between FTX and a hedge fund named Alameda Research. Federal prosecutors had initially recommended a much longer sentence for Bankman-Fried, who shifted the base of operations to the Bahamas and lived in a swanky mansion with other shot-callers at FTX.
In the months that followed his arrest and extradition, he was put briefly under home arrest, a spell that also marked a media blitz to recover his tarnished image and pleas for a more lenient prison term. Meanwhile, multiple co-conspirators and top executives at the firm, including Nishad Singh, former girlfriend Caroline Ellison, Gary Wang, and Ryan Salame, had already pleaded guilty. Since his arrest, Bankman-Fried has continued to claim that the lost billions could be recovered, and he was unaware of the illegal activities.
A saga worth Hollywood
But it seems the court was not convinced of his claims. "When not lying, he was evasive, hair-splitting, trying to get the prosecutors to rephrase questions for him. I've been doing this job for close for 30 years. I've never seen a performance like that," Judge Kaplan was quoted as saying by Inner City Press.
FTX was one of the biggest cryptocurrency exchanges in the world at one point and even launched its own token, while Bankman-Fried made it to the covers of magazines for being one of the world's youngest self-made billionaires and his effective altruism pledge. He also made fat donations to political campaigns and even struck celebrity endorsement deals with the likes of Larry David, Tom Brady, and Gisele Bundchen. He was also seen hanging out with Hollywood hotshots and even shared the stage with the likes of Bill Clinton.
In its last days, FTX inked a nonbinding deal with Binance, the world's largest cryptocurrency exchange, as a last-ditch rescue effort to get out of its liquidity crunch. The goal was a full acquisition, but merely a day later, Binance CEO Changpeng Zhao backed out of the deal as regulatory scrutiny heated up in the FTX saga. FTX's sentencing once again puts the spotlight back on the notoriously fragile world of crypto assets championed by the likes of Bitcoin and flooded with tokens that capitalize on anything from a meme dog to a token about British Royal Kate Middleton's cancer revelation.