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FTX founder Samuel Bankman-Fried sentenced to 25 years

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FTX founder Samuel Bankman-Fried sentenced to 25 years

Cointelegraaf, CC BY 3.0

By Brett Rowland (The Main Square)

A judge sentenced FTX founder Samuel Bankman-Fried to 25 years in prison on Thursday, marking the long fall of the former cryptocurrency star.

U.S. District Judge Lewis Kaplan also sentenced Samuel Bankman-Fried, better known as SBF, to three years of supervised release and ordered him to pay $11 billion for orchestrating a massive fraud.

Bankman-Fried, the founder of cryptocurrency exchange FTX and cryptocurrency trading firm Alameda Research, embezzled billions of dollars in customer funds deposited with FTX. Prosecutors say he defrauded FTX investors of more than $1.7 billion and Alameda lenders of more than $1.3 billion.

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“There are serious consequences for defrauding customers and investors,” Attorney General Merrick Garland said in a statement. “Anyone who believes he can hide his financial crimes behind wealth and power, or behind something brand new that he claims no one else is smart enough to understand, should think twice.”

Bankman-Fried, 32, of Stanford, California, was previously convicted of two counts of bank fraud, two counts of conspiracy to commit bank fraud, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud, and one count of conspiracy to commit commodities fraud, and one count of conspiracy to commit securities fraud, charge of conspiracy to commit money laundering, following a month-long trial.

Bankman-Fried once led FTX, a digital asset exchange platform that soared in popularity before crashing in 2022. Before the scandal, Bankman-Fried spent time with the rich and powerful. According to OpenSecrets, Bankman-Fried gave approximately $40 million in public donations during the 2022 election cycle, with the vast majority, $36.8 million, going to Democratic-affiliated groups. After the scandal, those who took Bankman-Fried’s money rushed to give it back, as The Center Square did before reported.

Bankman-Fried’s sentence is among the longest for fraud in the US

Bernard Ebbers, co-founder and CEO of WorldCom, received 25 years, but was released after 13 years due to declining health. He died a month after his release.

Enron CEO Jeffrey Skilling was initially given 24 years, but that was later reduced to 14 years. He was released in 2019 after serving 12 years.

Bernie Madoff, the financier behind the largest known Ponzi scheme, got 150 years. He died in 2021 after serving nine years.

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Bankman-Fried was the founder and CEO of FTX, an international cryptocurrency exchange. From 2019 to 2022, federal prosecutors say he was the ringleader and mastermind of a scheme to defraud FTX customers by embezzling billions of dollars of those customers’ money.

Bankman-Fried took FTX client funds for personal use, to make investments and millions of dollars in political contributions to candidates, and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency trading fund that Bankman-Fried also had founded. Bankman-Fried also defrauded Alameda lenders and FTX stock investors by providing them with false and misleading financial information that concealed his misuse of customer deposits, prosecutors said.

Syndicated with permission from Center Square.