Crypto entrepreneur Sam Bankman-Fried who is also known as the ‘Crypto King’ was sentenced to 25 years of imprisonment by the U.S. District Judge on 28th March 2024.
The District Judge announced his sentence after the massive fraud conducted by Banman-Fried unraveled with the fall of FXT.
Many FXT users came forward after his business collapsed, and it left both customers and investors short of billions of dollars.
Sam Bankman-Fried, also known as SBF, founded the FTX in the year 2019 which is a cryptocurrency exchange platform.
When the cryptocurrency flooded and came into prominence during the COVID-19 pandemic, Bankman-Fried and his Bahamas-based company prospered. The company acquired a profit of $150 in 2020 alone.
His company has also offered financial assistance to another cryptocurrency exchange BlockFi and saved it from a major liquidity crisis. He had also brought another failed crypto platform – Voyager and also brought some assets of Celsius which was also on the verge of going bankrupt.
The downfall of FXT came after its rival Binance pushed down the prices of FTT on 6th November 2022.
The major cash held by FXT was in the form of its token FTT. At the same time, the Securities and Exchange Commission (SEC) and the CFTC investigated the FTX U.S. after a set of allegations came to light, including the exchange of mishandled customer funds.
The next day, about $1 billion to $2 billion in customer funds were missing after unauthorized transactions were conducted in the firm.
Bankman-Fried was convicted last November for conducting fraud and illegally using company investments on his purchases such as purchasing properties in the Caribbean bribing Chinese officials, and making other illegal political donations.
Before announcing his judgment, U.S. District Judge Lewis A Kaplan had harshly criticized Bankman-Fried’s financial scam and deceit.
Kaplan also condemned Bankman-Fried for lying that he did not know about the financial transactions and that the company was taking customers’ money and was being used up illegally and lavishly.
He also said that according to the official government guidelines, Bankman-Fried could have received over 100 years of imprisonment as per the severity of the crimes and fraud that he had committed.
The Assistant U.S Attorney Nicolas Roos had recommended 40 to 50 years of a prison sentence for Bankman-Fried saying that he should be kept out of the light to ensure no such crimes should be committed again.
He also said that Bankman-Fried also looted more than thousands of his customers through this platform.
However, Kaplan said that 25 years was just enough and there was no need to increase the years of his imprisonment as there was no threat of Bankman-Fried conducting violence.
Bankman-Fried’s lawyers and family members pleaded with the court to ease his imprisonment, saying that he is unlikely to commit the crimes again. They also said that the FXT’s investors have recovered their funds, which was disregarded by the court and lawyers.
Kaplan also said that he would recommend the Federal Bureau of Prisons to send Bankman-Fried to a prison near San Francisco which was a medium-security prison because of his autism and social awkwardness and taking into consideration that high-security prison might make him uncomfortable due to his condition.
The 32-year-old apologized to the court about his mistakes saying he had let down a lot of people and he was sorry for what happened at every stage.
He also spoke in the court for about 20 minutes, mainly expressing his regrets about making a lot of mistakes. His parents Barbara Fried and Allan Joseph Bankman said to the press that they were heartbroken and they would continue to fight for their son’s early release.
