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NEW: Sam Bankman-Fried’s Prison Sentence Is Revealed

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8 months ago

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Sam Bankman-Fried, the founder of the now-bankrupt cryptocurrency exchange FTX, has been found guilty of defrauding customers, investors, and lenders out of up to $14 billion. The trial, which concluded with Bankman-Fried’s conviction on all counts, accused Fried and three top executives of orchestrating the scheme that allowed secret access to FTX’s customer deposits.

These funds were misappropriated for investments, loan repayments, political donations, and real estate purchases.

Despite Bankman-Fried’s testimony claiming his innocence and attributing the collapse to poor business decisions rather than fraud, the prosecution argued that he deliberately lied about the safety of customer deposits, engaging in massive financial fraud​​.

“He knew it was wrong, he knew it was criminal,” Judge Lewis A. Kaplan commented on Mr. Bankman-Fried’s actions. “He regrets that he made a very bad bet about the likelihood of getting caught, but he’s not going to admit a thing.”

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Legal experts and those familiar with the case suggested that Bankman-Fried would face a lengthy prison sentence, potentially spanning decades. The charges carry a maximum sentence of 110 years.

This is fueled by Bankman-Fried’s conduct during the trial, including his testimony, which some believe may negatively influence the judge’s decision. Furthermore, additional charges related to bank fraud and bribery were considered in his sentencing​​.

He was sentenced to 25 years in federal prison.

In a move to mitigate his sentence, Bankman-Fried’s defense argued for leniency, citing efforts to recover funds for FTX’s customers. His lawyer suggested a prison term of 5-1/4 to 6-1/2 years. The request is backed by claims that most customers will be repaid in full, an assertion supported by the bankrupt company’s recent statements.

Bankman-Fried, commonly known by his initials SBF, was a notable figure in the cryptocurrency industry. Born in 1992 in Stanford, California, he comes from an academic family; both of his parents are professors at Stanford Law School. Bankman-Fried’s early interest in effective altruism—a philosophical stance that encourages individuals to use their resources to help others as much as possible—significantly influenced his career path.

He studied Physics at the Massachusetts Institute of Technology (MIT), where he graduated in 2014. After college, SBF began his career in traditional finance as a trader at Jane Street Capital, a proprietary trading firm known for its quantitative approach to trading global financial markets. His experience at Jane Street provided him with a solid foundation in trading and finance, which he later leveraged in the cryptocurrency market.

In 2017, Bankman-Fried ventured into the cryptocurrency space by founding Alameda Research, a quantitative trading firm specializing in cryptocurrencies. Alameda Research quickly grew into one of the most influential trading firms in the crypto market, known for its significant trading volume and liquidity provision across multiple exchanges.

Building on his success with Alameda Research, SBF founded FTX, a cryptocurrency exchange, in 2019. FTX stood out for its innovative products, such as derivatives, options, and volatility products, catering to professional traders and institutional investors. Under Bankman-Fried’s leadership, FTX experienced rapid growth, becoming one of the leading cryptocurrency exchanges globally.

However, in late 2022, FTX faced significant financial difficulties that led to its bankruptcy.

“A lot of people feel really let down, and they were very let down,” Bankman-Fried said. “I’m sorry about that. I’m sorry about what happened at every stage.” He said that his decisions will “haunt” him every day.



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