Sam Bankman Fried was sentenced Thursday to decades in prison, five months after he was found guilty of stealing more than $8 billion from customers of the bankrupt cryptocurrency exchange FTX. facing the prospect of punishment.
The 32-year-old convicted fraudster will learn his fate at a Manhattan federal court hearing scheduled for 9:30 a.m., capping an epic and rapid fall from glory.
Bankman Fried, with his now infamous sloppy hairdo and uniform of T-shirt and khaki shorts, was a cryptocurrency marketer in the U.S. before his platform suddenly melted down in November 2022. He was emerging as a friendly face in the world.
His company was worth $40 billion at its peak, and the tech mogul has flown around in private jets, donated millions of dollars to politicians supposedly friendly to cryptocurrencies, and even attended the Super Bowl. I sat down with celebrities.
But weeks after the platform’s collapse, he was arrested in the Bahamas and charged with stealing FTX users’ funds to cover $8 billion in debt from his failed hedge fund, Alameda Research.
Last November, a jury found that the former crypto golden boy looted the accounts of what prosecutors called “tens of thousands” of people, including in war-torn and unstable countries, and used the nest eggs they had entrusted to them. was recognized as having been lost.
He was also found guilty of defrauding FTX’s lenders by sending a false balance sheet and of lying to the company’s investors. Prosecutors say he earned about $3 billion in ill-gotten gains from these schemes.
Bankman Fried has been in jail since August after U.S. District Judge Lewis Kaplan revoked his bail on charges of witness tampering, including leaking ex-girlfriend Caroline Ellison’s diary to journalists. There is.
Federal authorities asked Kaplan to convict Bankman Fried on seven counts of fraud and conspiracy and sentence him to 40 to 50 years in prison.
Lawyers for the disgraced crypto ace asked for him to serve five-and-a-half to six-and-a-half years in prison instead.
During the month-long trial, Bankman Fried changed his scruffy appearance and put on a slicked-back hairstyle and a suit and tie to testify in his own defense, but the outcome was not successful. I did not go.
He claimed more than 100 times that he “couldn’t remember” details about his business, including repeatedly promising that his platform was “secure,” and later revealed dozens of statements in which he claimed he didn’t remember. I was faced with mountains of evidence.
The fallen crypto prince also showed no remorse during his four days on stage for customers whose funds disappeared in FTX’s collapse.
“Bankman Freed still refuses to admit that what he did was wrong,” prosecutors wrote in a court filing earlier this month. “His life in recent years has been one of unparalleled greed and arrogance. Ambition and rationalization. And he takes risks and repeatedly gambles with other people’s money.”
Three of his former business partners, including Mr. Ellison, Alameda’s former CEO, have pleaded guilty to their own fraud and betrayed him, allowing the brash math whiz to join a hedge fund. He testified that he set up a secret system that allowed “backdoor” access. Exchange cash.
Bankman Freed also used FTX customer funds to make more than $100 million in political contributions ahead of the 2022 election and rented a luxurious $40 million penthouse in the Bahamas where he lived and worked with colleagues. prosecutors said.
The Fed has asked a judge to order Bankman Freed to pay $11 billion in restitution, including $8 billion to customers, $1.7 billion to investors, and $1.3 billion to lenders, to ensure everyone is safe. I asked him to give me an order.
During his trial, federal authorities unfairly portrayed the MIT graduate as a “supervillain” who stole from clients to enrich himself, but in reality, he was not driven by greed, his lawyers said. It is said that there was not.
The convicted fraudster’s motive was actually only to donate his wealth to charity, lawyer Mark Mukasey argued in court.
Bankman-Fried suffers from a condition known as “anhedonia,” which is “characterized by an almost complete lack of enjoyment, motivation, or interest,” which is why Bankman-Fried is in fact a “luxury, expensive… The lawyer argued that he was unable to enjoy anything at all.
The tech whiz’s mother, Stanford law professor Barbara Freed, also asked the judge to give her a lighter sentence because her son exhibits behaviors consistent with those on the autism spectrum.
Bankman-Freed’s inability to read society’s cues will put him in “extreme danger” in prison, his mother warned.
“I am deeply concerned about Sam’s life in a typical prison environment,” Fried wrote in court.
Bankman Freed’s lawyers also argued that his sentence should be reduced because FTX’s customers and lenders will be able to recover their losses through the company’s bankruptcy filing.
But federal prosecutors rejected that claim, saying in court papers that it was “not clear” whether anyone would make a full recovery in the process.
A separate lawsuit over Bankman Fried’s alleged violations of campaign finance laws concerns his extensive contributions to Democrats, including President Joe Biden, as well as undisclosed “dark” contributions that benefited Republican leaders. It had the potential to shed more light on the history of political donations, but was canceled in December.
Prosecutors said there was a “strong public interest” in sentencing Bankman-Fried as soon as possible, given that the sentence could include large forfeitures to victims.
Federal authorities also had not yet received permission from Bahamian authorities to pursue campaign finance charges under the extradition agreement, according to U.S. prosecutors.
Bankman Fried also faced explosive charges that he bribed at least one Chinese official with $40 million to help unfreeze trading accounts he owned. The case did not go to trial either.
He continues to maintain that he committed no crime and plans to appeal his conviction.
