Sam Bankman-Fried Gets 25 Years Behind Bars

(LibertyInsider.org) – FTX founder Sam Bankman-Fried will spend a significant amount of time behind bars for his role in a wire fraud and money laundering scheme that bilked investors out of more than $8 billion in funds. On March 28, US District Judge Lewis A. Kaplan sentenced the crypto kingpin to serve at least 25 years in prison, noting that Bankman-Fried was highly unlikely to ever admit to his crimes.

“He regrets that he made a very bad bet about the likelihood of getting caught,” Kaplan said before revealing the sentence. “But he is not going to admit a thing, as is his right.”

Bankman-Fried first came under fire in 2022 when reports emerged that his cryptocurrency exchange platform, FTX, was struggling with liquidity issues. On November 2, CoinDesk, a leading fintech industry news outlet, published an article sharing data reporters pulled from the balance sheet of the finance mogul’s hedge fund, Alameda Research (AR). The report revealed that a significant portion of AR’s assets was held in FTX’s native token, FTT.

Samuel Bankman-Fried Sentenced to 25 Years for His Orchestration of Multiple Fraudulent Schemes

🔗: https://t.co/mrYOGUdcxq pic.twitter.com/ZL5GrX1HHO

— U.S. Department of Justice (@TheJusticeDept) March 28, 2024

Bankman-Fried was also accused of intentionally facilitating the unlawful mixing of funds between his hedge fund and cryptocurrency platforms. He reportedly diverted millions of dollars in customer assets into high-risk investments for Alameda Research.

Suspicions skyrocketed after then-Binance CEO Changpeng Zhao stated that his company intended to sell off its entire stake in FTX’s token, citing concerns over the platform’s financial stability. This set off a wave of withdrawal requests that the company was unable to fulfill.

In a matter of days, FTX’s shortfall of assets became impossible for investors to ignore. The platform went into a devastating free-fall that culminated in a total collapse at the end of November 2022, triggering a federal investigation.

The following month, prosecutors in Manhattan charged Bankman-Fried with eight counts of wire fraud, money laundering, and campaign finance violations. The 31-year-old former billionaire was arrested in the Bahamas.

Bankman-Fried immediately defended his actions, claiming he acted in good faith and could pay all customers back. He continues to maintain that defense even now. But as Kaplan noted in his closing comments, the idea that his risky bets would pay off did not make his actions legal. “It is logically flawed; it is speculative,” the judge said, explaining that a thief doesn’t deserve leniency just because their gamble worked out.