The Press and Journal (Aberdeen and Aberdeenshire)
‘Crypto King’ jailed for 25 years over FTX fraud
Crypto entrepreneur Sam Bankman-Fried was sentenced to 25 years in prison yesterday for billion-dollar fraud that unravelled with the collapse of FTX, once one of the world’s most popular platforms for exchanging digital currency.
Bankman-Fried, 32, was convicted in November of fraud and conspiracy – a dramatic fall from a year earlier when his companies seemed to be riding a crest of success that resulted in Super Bowl adverts and celebrity endorsements from the likes of American football star Tom Brady and comedian Larry David.
US District Judge Lewis A Kaplan imposed the sentence in the same Manhattan courtroom where, four months ago, Bankman-Fried testified that his intention had been to revolutionise the cryptocurrency market with his innovative and altruistic ideas, not to steal.
Mr Kaplan said the sentence reflected “that there is a risk this man will be in position to do something very bad in the future.”.
He added that it was “for the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”
Mr Kaplan agreed with prosecutors that Bankman-Fried should not get leniency just because some investors and customers might get some of their lost money back. He called the argument “logically flawed” and “speculative”.
He said customers lost about $8 billion (£6.3bn), investors lost $1.7bn (£1.3bn) and lenders were shorted by $1.3bn dollars (£1.02bn).
Mr Kaplan also cited three instances where he concluded that Bankman-Fried committed perjury during his trial testimony, including when Bankman-Fried testified that he didn’t know, until weeks before FTX collapsed, that customer funds were being diverted to a hedge fund offshoot of FTX.
Given a chance to speak, Bankman-Fried, previously known as the ‘Crypto King’, apologised in a statement.
He said: “A lot of people feel really let down. And they were very let down.
And I’m sorry about that. I’m sorry about what happened at every stage.”
Defence lawyer Marc Mukasey said his client was misunderstood.
Mr Mukasey said: “Sam was not a ruthless financial serial killer who set out to hurt people.
“Sam Bankman-Fried doesn’t make decisions with malice in his heart. He makes decisions with math in his head.”
A jury found that Bankman-Fried illegally used money from FTX depositors to cover his expenses, which included purchasing luxury properties in the Caribbean, alleged bribes to Chinese officials and private planes.
In a court filing, prosecutors told Judge Lewis A Kaplan: “The defendant victimised tens of thousands of people and companies, across several continents, over a period of multiple years.
“He stole money from customers; he lied to investors; he sent fabricated documents to lenders; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials. Each of these crimes is worthy of a lengthy sentence.”
Three other people from Bankman-Fried’s inner circle pleaded guilty to related crimes and testified at his trial.
Caroline Ellison, once the girlfriend of Bankman-Fried, described him as a calculating individual, who knew that he was likely committing crimes when he directed the use of customer funds.
Two other one-time friends of Bankman-Fried, Gary Wang and Nishad Singh, also testified they felt they were directed by Bankman-Fried to commit fraud.