In a shocking development, FTX co-founder Sam Bankman-Fried has been sentenced to 25 years in federal prison for defrauding and stealing billions of dollars from clients of the cryptocurrency platform. This was announced by US District Judge Lewis A. Kaplan in federal court in Manhattan. Despite Bankman-Fried claiming to regret what happened at all times for the collapse of FTX, which uncovered a fraud of about 10 billion dollars, the convicted man faced up to 110 years behind bars after being found guilty last year of seven crimes, including fraud and conspiracy, according to the Bloomberg agency.
During the trial, prosecutors accused Bankman-Fried of diverting billions of dollars from FTX to its sister hedge fund, Alameda Research, to spend on speculative investments, more than 300 political donations, and expensive real estate assets. Faced with market volatility, lenders began asking for their money in 2022 and Bankman-Fried used FTX client funds to pay them back. But an avalanche of customer withdrawals culminated in FTX filing for bankruptcy in November 2022 and Bankman-Fried resigning as CEO.
Despite his claims of remorse, Judge Kaplan dismissed Bankman-Fried’s statement saying he was not truly sorry and focusing instead on the seriousness of the crime. “There is a risk that this man will be in a position to do something very bad in the future,” Judge Kaplan said during sentencing. It remains to be seen what will become of Bankman-Fried after he leaves prison but it is clear that his actions have had far reaching consequences within the cryptocurrency industry and beyond.