FTX Co-Founder Sam Bankman-Fried Sentenced to 25 Years for $8 Billion Crypto Fraud
Cryptocurrency exchange firm FTX’s co-founder Sam Bankman-Fried has been slapped with a 25-year jail sentence. Sam is accused of crypto fraud targeting customers and investors. In this case, Sam’s three accomplices, Bankman-Fried’s three associates, have also been found guilty. After receiving the sentence, Bankman-Fried stated that he made selfish decisions that have been troubling him every day.
In this case, Sam was arrested in the Bahamas in December 2022. He was later extradited to the United States. In November 2023, Bankman-Fried was found guilty of defrauding investors and customers of over $8 billion, which is approximately ₹832 billion.
This case marked one of the largest scandals in American history. Following Bankman-Fried’s conviction, there was a significant downturn in the US stock market. At one time, FTX was the world’s second-largest cryptocurrency exchange firm.
Court Orders Seizure of Over $11 Billion
In the Manhattan District Court, a sentence has been handed down to Sam, co-founder of the US cryptocurrency exchange firm FTX, to serve a jail term. US District Judge Louis E. Kaplan delivered the verdict, expressing concern over the possibility of Sam committing more fraudulent activities in the future.
The judge ordered the seizure of Sam’s assets totaling more than $11 billion and recommended that he be held in a medium-security jail in San Francisco.
Complainants demanded a sentence of 40-50 years, accusing Sam of financial crimes that have affected countless individuals and organizations worldwide, resulting in losses exceeding $10 billion.
The charges include embezzlement, customer fraud, falsification of documents, illegal political contributions, and collusion with foreign officials.
What’s Behind the Entire Issue?
FTX was the world’s second-largest cryptocurrency trading company. Due to financial irregularities, FTX Trading Limited faced legal action. According to news agency Reuters, Sam, co-founder of FTX, transferred a staggering $10 billion from the company’s trading arm, Almeda Research, in a covert manner. Almeda allegedly used these funds for trading purposes.
When losses occurred in trading, CoinDesk, a crypto publication, leaked the unbalanced balance sheet. This report triggered turmoil within FTX. Within three days, FTX incurred estimated losses of around $6 billion. The sudden downturn due to the unexpected losses forced FTX to face a liquidity crisis, meaning they couldn’t process the losses. Subsequently, they filed for bankruptcy.
Bankman-Fried’s Net Worth Plummeted to Zero
After FTX’s irregularities came to light, Fried’s $16 billion fortune evaporated within just a few days. At one point, Sam Bankman-Fried’s net worth had soared to $26 billion. However, due to the liquidity crunch caused by FTX Trading Limited’s irregularities, his net worth has now plummeted to zero.
Who is Sam Bankman-Fried?
Sam Bankman-Fried was once among the biggest names in the crypto industry. He founded the crypto exchange startup FTX in 2019 while at the Massachusetts Institute of Technology. Within a short span, this startup became one of the world’s largest crypto exchange platforms. However, within two years, he faced an allegation of market manipulation, which led to one of the largest fines in American history.
“Many people are truly disappointed, and I am sorry for them,” said Bankman-Fried, 32, during the sentencing. “Every step I took, I took for them. There are some things I should have done and some I shouldn’t.”
In a statement, Bankman-Fried’s family expressed their sorrow, stating, “We are deeply saddened and will continue to fight for our son.” Joseph Bankman and Barbara Fried, both Stanford law professors, were present in court for the sentencing hearing.
