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On March 28, Sam Bankman-Fried was sentenced to 25 years in prison by US District Judge Lewis Kaplan at a Manhattan court. Bankman, the founder of FTX, is accused of stealing $8 billion from his customers.
Before handing down the sentence, Kaplan said,
"He knew it was wrong. He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right."
As per the Judge, Sam Bankman-Fried also lied about not knowing that his hedge fund was spending customer deposits from FTX.
His arrest comes after a jury found Bankman guilty of seven fraud and conspiracy counts from FTX's 2022 collapse on November 2, 2023.
What did Sam Bankman-Fried do?
Sam Bankman-Fried, founder of FTX cryptocurrency exchange, was found guilty of fraud and other crimes on November 3, 2023.
Bankman launched Alameda Research in 2017 and FTX in April 2019. FTX emerged as an international cryptocurrency exchange platform, and the company's success led to a $2 billion venture fund.
Bankman resigned from FTX on November 11, 2022, after the company collapsed due to potential leverage and solvency concerns. He was arrested in the Bahamas, which served as headquarters for FTX, and was extradited to the US in December 2022.
Bankman faced numerous criminal fraud charges brought forth by Damian Williams, the US Attorney for the Southern District of New York. As per Williams, Bankman-Fried pulled 'one of the biggest financial frauds' in American history.
Commodity Futures Trading Commission (CFTC) also accused Bankman of manipulating the price of his exchange's FTX token, along with front-running customers.
On December 21, 2022, Damian Williams revealed that Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of FTX, had pleaded guilty to defrauding investors.
After Bankman's release on December 22, 2022, on a $250 million bond, he was made to live with his parents in Palo Alto, California, where he was required to wear an electronic monitoring bracelet. He was also required to take mental health and substance abuse counseling during that time.
During the recent March 28 hearing, Judge Lewis Kaplan found FTX customers to have lost $8 billion. FTX's equity investors lost $1.7 billion, and lenders involved in Alameda Research hedge fund lost $1.3 billion.
As per Reuters, although Bankman accepts making mistakes such as not implementing a risk-management team, he denies intending to defraud or steal customers' money.
