(NewsSpace.com) – On December 12, 2022, cryptocurrency exchange FTX founder and CEO Sam Bankman-Fried was arrested and charged with a host of financial crimes, including wire fraud, conspiracy to commit fraud, and money laundering. His trial began in October of last year, and he was convicted of seven counts in November. The offenses against him added up to a potential 110 years in prison. He recently received his sentence.
On Thursday, March 28, Judge Lewis Kaplan sentenced Bankman-Fried to 25 years in prison. Prosecutors were originally seeking 40 to 50 years considering the nature of his crimes, where he bilked his customers out of $8 billion in greed. His defense team asked for 6.5 years.
When Judge Kaplan handed down the sentence, saying, “He knew it was wrong. He knew it was criminal,” Bankman-Fried did not react. His parents were at the sentencing and sat quietly, staring at the floor.
In addition to serving 25 years in jail, Bankman-Fried must also forfeit approximately $11 billion in assets. He is currently jailed in Brooklyn, New York, at the Metropolitan Detention Center, but will be moved to a low- or medium-security prison closer to his parents’ home in San Francisco.
Bankman-Fried’s story isn’t just a testimony to how greed can go very wrong, it’s also a cautionary tale about the volatility of cryptocurrency, especially since it’s very loosely regulated. The former CEO was able to get away with risky moves because of a lack of accountability, but that all imploded just three years after he founded the company.
A run on deposits is responsible for revealing the $8-billion gap in funds, which then led to Bankman-Fried resigning and turning over the company to long-time bankruptcy litigator, John Ray III, who became well-known after the Enron fiasco. Ray then lambasted the company’s operations, including the fact that Bankman-Fried irresponsibly spent business funds to buy lavish goods and homes for his employees.
Following the sentencing, Bankman-Fried’s attorney, Mark Cohen, said the team “respect[s] the jury’s decision,” despite being disappointed with the outcome. He said the former CEO “will continue to vigorously fight the charges against him.”
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