Sam Bankman Freud was sentenced to 25 years in prison for the multi-billion dollar FTX fraud

Sam Banksman Freud A judge on Thursday sentenced him to 25 years in prison for stealing $8 billion (about Rs 66,678 crore) from bankrupt consumers. FTX The cryptocurrency exchange he founded was the last step in the former billionaire wunderkind’s dramatic downfall.

U.S. District Judge Lewis Kaplan handed down the sentence after a Manhattan court hearing rejected Bankman Freud’s claim that FTX users did not actually lose money and found that he had misled his lawsuit. Lied during testimony. A jury found Bankman-Fried, 32, guilty on Nov. 2 of seven counts of fraud and conspiracy stemming from the 2022 liquidation of FTX in what prosecutors described as one of the largest financial frauds in U.S. history.

Kaplan said that Bankman-Freud showed no remorse.

“He knew it was wrong,” Kaplan said. “He knew it was criminal. He’s sorry he made such a bad bet about the possibility of being caught. But he won’t admit to anything, as is his right.”

Bankman Fried, wearing a beige short-sleeve prison T-shirt, acknowledged during his 20-minute remarks to the judge that FTX users had been hurt and offered an apology to his former FTX colleagues — but no criminal wrongdoing. did not recognize

He has vowed to appeal his conviction and sentence.

Bankman Freud stood before him with folded hands as Kaplan read the sentence. He then spoke briefly with his defense attorney, Mark McAsey, before being escorted out of the courtroom by members of the U.S. Marshals Service.

The sentence marked the biggest trophy haul ever in U.S. authorities’ crackdown on corruption in cryptocurrency markets from Bankman Freud, an ultra-wealthy businessman and major political donor.

“There are serious consequences for defrauding consumers and investors,” US Attorney General Merrick Garland said in a statement. “Anyone who believes they can hide their financial crimes behind wealth and power, or behind some shiny new thing they claim no one else is smart enough to understand, think twice. One should think.”

Kaplan found that FTX customers lost $8 billion, FTX equity investors lost $1.7 billion (about Rs. 14,169 crore), and lenders based at Alameda Research hedge fund Bankman-Fried $1.3 billion (about Rs. 10,835). Crores of rupees) was lost. It imposed a forfeiture order of $11 billion (roughly Rs. 91,682 crore) and authorized the government to pay the seized assets to the victims.

Federal prosecutors had asked for a prison sentence of 40 to 50 years. Makasi had argued for a sentence of less than 5-1/4 years.

‘I’m sorry for that’

Addressing the judge, Bankman-Fried said, “Customers are suffering … I didn’t mean to minimize that. I also think that’s missing from what I’ve said during this process. was, and I apologize for that.”

Referring to her FTX colleagues, Bankman-Fried added, “They put so much into it, and I threw it all away. It bothers me every day.”

Three former close associates testified as prosecution witnesses that Bankman-Fried directed them to use FTX customer funds to cover losses at Alameda Research. All three have confessed to the fraud.

Kaplan said Bankman Fried lied when he testified that he did not know Alameda Research had spent customer deposits taken from FTX.

McAsey tried to distance Bankman-Fried from notorious fraudsters like Bernie Madoff, saying he was “not a ruthless financial serial killer” but a “weird math nerd” who led to the collapse of FTX. After trying to refund customers their money.

“Sam Bankman-Freud doesn’t make decisions with malice in his heart,” McAsey added. “He makes decisions with math in his head.”

Bankmann Freud’s eyes reddened as he appeared to hold back tears as he spoke.

His parents, Stanford University law professors Joseph Bankman and Barbara Fried, attended the sentencing. Bankman had a green umbrella as he walked out of the courthouse on a rainy New York afternoon, his arms around each other.

“We are heartbroken and will continue to fight for our son,” he said in a statement.

‘Power and Influence’

A graduate of the Massachusetts Institute of Technology, Bankman-Fried has seen the value of bitcoin and other digital assets skyrocket to a net worth of $26 billion (roughly Rs. 2,16,705 crore), according to Forbes magazine. Before turning 30 years old.

Bankman-Fried is known for her messy mop of curly hair and her affiliation with a movement called effective altruism, which encourages talented young people to focus on making money and giving it to worthy causes. .

He was one of the top contributors to Democratic candidates and causes ahead of the 2022 US midterm elections. Kaplan pointed to trial evidence that Bankman Freud also donated to Republicans through “straw” donors to hide his involvement.

The judge described Bankman Freud’s attempts to present himself as a “good guy” as an act, adding, “The motive was power and influence.”

Bankman-Fried has been held at the Metropolitan Detention Center in Brooklyn since August 2023, when her bail was revoked after Kaplan allegedly tampered with witnesses at least twice. Kaplan said he would recommend that Bankman Freud be sent to a prison near San Francisco.

© Thomson Reuters 2024

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