Sam Bankman-Fried was sentenced by a judge to 25 years in prison on Thursday for stealing $8 billion (roughly Rs. 66,678 crores) from customers of the now-bankrupt FTX cryptocurrency exchange he founded, marking the dramatic fall of the former billionaire wunderkind. This was the final stage. ,
U.S. District Judge Lewis Kaplan rejected Bankman-Fried’s claims in a Manhattan court hearing that FTX clients did not actually lose money and found that she lied during her trial testimony. A jury found Bankman-Fried, 32, guilty on Nov. 2 of seven fraud and conspiracy counts stemming from the 2022 collapse of FTX, which prosecutors have called one of the largest financial frauds in U.S. history.
Kaplan said Bankman-Fried has shown no remorse.
“He knew it was wrong,” Kaplan said. “He knew it was criminal. He regrets that he made such a bad bet about the chances of getting caught. But he won’t admit to anything, as is his right.”
Bankman-Fried, wearing a beige short-sleeve prison T-shirt, acknowledged during 20-minute remarks before the judge that FTX clients were harmed and offered an apology to her former FTX colleagues — but did not admit criminal wrongdoing. .
He has vowed to appeal his conviction and sentence.
When Kaplan read the sentence, Bankman-Fried stood in front of her with folded hands. He then spoke briefly with his defense attorney Mark Mukasey before being escorted out of the courtroom by members of the US Marshals Service.
The sentence marked the culmination of Bankman-Fried’s transition from a super-wealthy entrepreneur and major political donor to the biggest trophy yet in a crackdown by US authorities over manipulation in the cryptocurrency markets.
“There will be serious consequences for defrauding consumers and investors,” U.S. Attorney General Merrick Garland said in a statement. “Anyone who believes they can hide their financial crimes behind money and power, or behind a shiny new thing they claim no one is smart enough to understand, should think twice.”
Kaplan found that FTX clients lost $8 billion, FTX’s equity investors lost $1.7 billion (roughly Rs. 14,169 crores), and lenders to Alameda Research hedge fund Bankman-Fried lost $1.3 billion (roughly Rs. 10,835 crores). There was a loss of Rs. He imposed a confiscation order of $11 billion (about Rs 91,682 crore) and authorized the government to pay the seized assets to the victims.
Federal prosecutors had sought a sentence of 40 to 50 years. Mukasey had argued for a sentence of less than 5-1/4 years.
‘I’m sorry for that’
Addressing the judge, Bankman-Fried said, “Clients are suffering… It was not my intention at all to minimize this. I also feel that what I have said during this process has been flawed.” , and sorry about that.”
Referring to her FTX colleagues, Bankman-Fried said, “They put a lot of themselves into it, and I threw all that away. It haunts me every day.”
Three former close associates testified as prosecution witnesses that Bankman-Fried had instructed them to use FTX client funds to offset losses at Alameda Research. All three have confessed to the crime of fraud.
Kaplan said Bankman-Fried lied when testifying that she did not know Alameda Research had spent customer deposits taken from FTX.
Mukasey sought to distance Bankman-Fried from notorious fraudsters such as Bernie Madoff, saying that he was “not a ruthless financial serial killer” but rather a “weird math whiz” who helped clients recover their money after the collapse of FTX. Tried to get it back.
Mukasey said, “Sam Bankman-Fried doesn’t make decisions with malice in his heart.” “He makes decisions with math in his mind.”
Bankman-Freed’s eyes turned red as he held back tears as Mukasey spoke.
His parents, Stanford University law professors Joseph Bankman and Barbara Fried, attended the sentencing. Bankman held a green umbrella, their arms around each other as they walked out of the courthouse on a rainy New York afternoon.
“We are heartbroken and will continue to fight for our son,” he said in a statement.
‘Power and influence’
According to Forbes magazine, Bankman-Fried, a graduate of the Massachusetts Institute of Technology, amassed a net worth of $26 billion (roughly Rs. 2,16,705 crores) before she turned 30, thanks to the surge in the values of Bitcoin and other digital assets. Would have happened. ,
Bankman-Fried is known for her tousled frizzy hair and commitment to a movement called Effective Altruism, which encourages talented young people to focus on earning money and putting it to good use.
He was one of the largest contributors to Democratic candidates and issues ahead of the 2022 US midterm elections. Kaplan pointed to trial evidence showing that Bankman-Fried also donated to Republicans through “straw” donors to conceal her involvement.
The judge described Bankman-Fried’s efforts to present himself as a “good guy” as an act and said, “The goal was power and influence.”
Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn since August 2023, when Kaplan revoked her bail after finding she likely tampered with witnesses at least twice. Kaplan said he would recommend sending Bankman-Fried to a prison near San Francisco.
© Thomson Reuters 2024
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