On Thursday, a judge sentenced Sam Bankman-Fried to 25 years in jail for stealing $8 billion from users of the now-bankrupt FTX cryptocurrency exchange he established, marking the final stage in the erstwhile billionaire wunderkind's stunning downfall.
U.S. District Judge Lewis Kaplan imposed the sentence during a Manhattan court session after rejecting Bankman-Fried's claim that FTX customers did not lose money and determining that he lied throughout his trial evidence. On November 2, a jury found Bankman-Fried, 32, guilty of seven fraud and conspiracy offences arising from FTX's 2022 collapse, which prosecutors described as one of the largest financial frauds in US history.
Kaplan claimed Bankman-Fried has exhibited no remorse.
"He knew it was wrong," Kaplan said. "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."
Bankman-Fried, dressed in a beige short-sleeve jail T-shirt, agreed that FTX consumers had suffered during his 20-minute testimony to the judge, and he apologised to his former FTX colleagues - but he denied criminal activity.
He intends to appeal his conviction and punishment.
Bankman-Fried stood with his hands clasped before Kaplan, who read the punishment. He then chatted briefly with his defence attorney, Marc Mukasey, before being escorted out of the courthouse by personnel of the United States Marshals Service.
The sentence represented the climax of Bankman-Fried's journey from ultra-wealthy entrepreneur and prominent political donor to the largest trophy to date in a crackdown by US authorities on cryptocurrency market misbehaviour.
"There are serious consequences for defrauding customers and investors," U.S. Attorney General Merrick Garland said in a statement. "Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice."
Kaplan discovered that lenders to the Alameda Research hedge fund that Bankman-Fried established lost $1.3 billion, FTX's customers lost $8 billion, and FTX's equity investors lost $1.7 billion. He issued an order for the forfeiture of $11 billion and gave the government permission to return seized assets to the victims.
A 40–50 year sentence was what the federal prosecution had requested. Mukasey had pleaded for a sentence of no more than five and a half years.
Bankman-Fried addressed the judge, stating, "Customers have been experiencing... It was not my intention to downplay it. I also think that's something that was missing from what I've said over the course of this process, and I'm sorry for that."
Bankman-Fried went on, "They put a lot of themselves into it, and I threw that all away," in reference to his FTX colleagues. I'm plagued by it daily."
As prosecution witnesses, three former close associates stated that they were instructed by Bankman-Fried to utilise FTX client monies to cover Alameda Research's losses. Each of the three has admitted guilt to fraud.
When Bankman-Fried claimed in court that he was unaware that Alameda Research had used client funds obtained from FTX, Kaplan argued he had lied.
By claiming that Bankman-Fried was "not a ruthless financial serial killer" but rather a "awkward maths nerd" who attempted to get customers their money back following FTX's bankruptcy, Mukasey attempted to set Bankman-Fried apart from well-known scammers like Bernie Madoff.
"Sam Bankman-Fried doesn't make decisions with malice in his heart," Mukasey added. "He makes decisions with math in his head."
As Mukasey was speaking, Bankman-Fried's eyes got red and he seemed to suppress his tears.
Joseph Bankman and Barbara Fried, law professors at Stanford University, who are his parents, were present at the sentencing. Arms encircling each other, they left the courthouse onto a rainy afternoon in New York, Bankman clutching a green umbrella.
"We are heartbroken and will continue to fight for our son," they said in a statement.
Before turning 30, Bankman-Fried, a graduate of the Massachusetts Institute of Technology, rode a spike in the values of bitcoin and other digital assets to a net worth of $26 billion, according to Forbes magazine.
Bankman-Fried gained notoriety for his messy curly hair and his support of the effective altruism movement, which inspires gifted youth to prioritise making money and donating it to deserving organisations.
Ahead of the US midterm elections in 2022, he was one of the major donors to Democratic politicians and causes. Kaplan cited trial testimony that demonstrated Bankman-Fried concealed his involvement by making donations to Republicans through "straw" contributors.
The judge described Bankman-efforts Fried's to portray himself as a "nice guy" as a performance, saying, "The objective was power and influence".
Since August 2023, Bankman-Fried has been held at the Metropolitan Detention Centre in Brooklyn. Kaplan withheld his bail after discovering that Bankman-Fried had probably tampered with witnesses at least twice. Kaplan stated that he would advise Bankman-Fried to be imprisoned in a facility in San Francisco.
(Source:www.moneycontrol.com)
U.S. District Judge Lewis Kaplan imposed the sentence during a Manhattan court session after rejecting Bankman-Fried's claim that FTX customers did not lose money and determining that he lied throughout his trial evidence. On November 2, a jury found Bankman-Fried, 32, guilty of seven fraud and conspiracy offences arising from FTX's 2022 collapse, which prosecutors described as one of the largest financial frauds in US history.
Kaplan claimed Bankman-Fried has exhibited no remorse.
"He knew it was wrong," Kaplan said. "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."
Bankman-Fried, dressed in a beige short-sleeve jail T-shirt, agreed that FTX consumers had suffered during his 20-minute testimony to the judge, and he apologised to his former FTX colleagues - but he denied criminal activity.
He intends to appeal his conviction and punishment.
Bankman-Fried stood with his hands clasped before Kaplan, who read the punishment. He then chatted briefly with his defence attorney, Marc Mukasey, before being escorted out of the courthouse by personnel of the United States Marshals Service.
The sentence represented the climax of Bankman-Fried's journey from ultra-wealthy entrepreneur and prominent political donor to the largest trophy to date in a crackdown by US authorities on cryptocurrency market misbehaviour.
"There are serious consequences for defrauding customers and investors," U.S. Attorney General Merrick Garland said in a statement. "Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice."
Kaplan discovered that lenders to the Alameda Research hedge fund that Bankman-Fried established lost $1.3 billion, FTX's customers lost $8 billion, and FTX's equity investors lost $1.7 billion. He issued an order for the forfeiture of $11 billion and gave the government permission to return seized assets to the victims.
A 40–50 year sentence was what the federal prosecution had requested. Mukasey had pleaded for a sentence of no more than five and a half years.
Bankman-Fried addressed the judge, stating, "Customers have been experiencing... It was not my intention to downplay it. I also think that's something that was missing from what I've said over the course of this process, and I'm sorry for that."
Bankman-Fried went on, "They put a lot of themselves into it, and I threw that all away," in reference to his FTX colleagues. I'm plagued by it daily."
As prosecution witnesses, three former close associates stated that they were instructed by Bankman-Fried to utilise FTX client monies to cover Alameda Research's losses. Each of the three has admitted guilt to fraud.
When Bankman-Fried claimed in court that he was unaware that Alameda Research had used client funds obtained from FTX, Kaplan argued he had lied.
By claiming that Bankman-Fried was "not a ruthless financial serial killer" but rather a "awkward maths nerd" who attempted to get customers their money back following FTX's bankruptcy, Mukasey attempted to set Bankman-Fried apart from well-known scammers like Bernie Madoff.
"Sam Bankman-Fried doesn't make decisions with malice in his heart," Mukasey added. "He makes decisions with math in his head."
As Mukasey was speaking, Bankman-Fried's eyes got red and he seemed to suppress his tears.
Joseph Bankman and Barbara Fried, law professors at Stanford University, who are his parents, were present at the sentencing. Arms encircling each other, they left the courthouse onto a rainy afternoon in New York, Bankman clutching a green umbrella.
"We are heartbroken and will continue to fight for our son," they said in a statement.
Before turning 30, Bankman-Fried, a graduate of the Massachusetts Institute of Technology, rode a spike in the values of bitcoin and other digital assets to a net worth of $26 billion, according to Forbes magazine.
Bankman-Fried gained notoriety for his messy curly hair and his support of the effective altruism movement, which inspires gifted youth to prioritise making money and donating it to deserving organisations.
Ahead of the US midterm elections in 2022, he was one of the major donors to Democratic politicians and causes. Kaplan cited trial testimony that demonstrated Bankman-Fried concealed his involvement by making donations to Republicans through "straw" contributors.
The judge described Bankman-efforts Fried's to portray himself as a "nice guy" as a performance, saying, "The objective was power and influence".
Since August 2023, Bankman-Fried has been held at the Metropolitan Detention Centre in Brooklyn. Kaplan withheld his bail after discovering that Bankman-Fried had probably tampered with witnesses at least twice. Kaplan stated that he would advise Bankman-Fried to be imprisoned in a facility in San Francisco.
(Source:www.moneycontrol.com)
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