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Sam Bankman-Fried sentenced to 25 years in prison for FTX fraud and money laundering

Sam Bankman-Fried, the co-founder and former CEO of cryptocurrency exchange FTX and trading firm Alameda Research, was sentenced to 25 years in prison by Judge Lewis Kaplan of the Southern District of New York (SDNY) approximately five months after being found guilty during the trial. All seven counts of fraud and money laundering.

“When he’s not lying, he’s evasive and nitpicking and trying to get prosecutors to rephrase issues,” Kaplan said Thursday, according to the Inner City Press. “I’ve been doing this for almost 30 years. I I’ve never seen a performance like this.”

His maximum possible sentence on seven counts – two fraud charges and five conspiracy charges – is 110 years.

Earlier this month, U.S. Justice Department prosecutors called for a “necessary” 40 to 50-year sentence. “The scale of Bankman-Fried’s fraud warrants severe penalties,” the notice said. “The amount of losses was at least $10 billion, making this one of the largest financial frauds ever committed.” On Thursday, Cards Poullan said the scope “will go beyond what is necessary.” In late February, Bankman-Fried’s attorneys filed a notice recommending their client receive a sentence of 63 to 78 months in prison, citing “personal concern,” “remorse,” “low-level culpability,” and more .

Whatever both sides wanted, the decades-long verdict was the culmination of Bankman-Fried’s five-week trial, which delved into how one of the world’s once largest cryptocurrency exchanges and its sister trading company were Closure in November.

His verdict could also send a signal to the entire crypto industry. As Judge Kaplan needs to consider that “the sentence needs to provide sufficient deterrence,” that is, deter other white-collar defendants and bad actors in the broader cryptocurrency space, former federal prosecutor Josh Naftalis York, who now works at Pallas Partners in New South Wales, told TechCrunch. “In other words, the court could consider how the SBF decision would send a message to the crypto-asset industry.”

Mark Bini, a former federal and state prosecutor who is now a partner at Reed Smith’s On Chain digital asset group, agrees. He said the verdict would be “a real market in the cryptocurrency space,” adding that the outcome “could become a yardstick for future sentencing involving cryptocurrency fraud.”

In the federal system, there is no parole.But defendants like Bankman-Fried can get “good time” credit, according to first step actBoth attorneys noted that this could reduce their sentences for good behavior while incarcerated. Beaney said there are many opportunities for first-time nonviolent offenders to receive reduced sentences. This could result in the defendant’s sentence being reduced by up to 15% from the original sentence imposed,” Naftalis added.

Bankman-Fried has been living at the Metropolitan Detention Center in Brooklyn, New York, since losing bail before trial. Other notorious former inmates at the correctional facility include Jeffrey Epstein associate Ghislaine Maxwell and “pharmaceutical bro” Martin Shkreli.

Review of SBF and FTX

Before prison, Bankman-Fried was at the top of the cryptocurrency world, dating celebrities like Katy Perry and award-winning athletes like Tom Brady, and ‘s company name is emblazoned on Major League Baseball umpires’ shirts and the Miami Heat arena. Before its collapse, FTX was one of the largest cryptocurrency exchanges by trading volume, behind Coinbase and Binance.

FTX grew user base to “millions” before collapse, expanding revenue from $10 million to $20 million in 2019, $80 million in 2020, and $1 billion in 2021; Bankman-Ver Reed testified that daily revenue in 2021 was $3 million.

But after crypto media publication CoinDesk revealed Alameda’s erroneous balance sheet in November 2022, Bankman-Fried’s popularity and trust quickly declined throughout the cryptocurrency community, triggering an industry-wide ripple effect and criticism of FTX and concerns about its liquidity. Within days, the exchange filed for bankruptcy and Bankman-Fried resigned as CEO.

His trial and the months leading up to it revealed that the problem was much deeper than initially thought, with Bankman-Fried and other executives misusing more than $8 billion in client funds. Bankman-Fried testified that he did not defraud FTX customers or use their funds, but that Alameda “borrowed” the funds from the exchange.

Bankman-Fried’s lead attorney, Mark Cohen, also said the government launched a Hallmark movie-like case against Bankman-Fried despite making “poor business judgment.” But the government “tried to paint Sam as some kind of villain, some kind of scoundrel.” monster. “

Ultimately, the jury did not accept this argument. Prosecutors strongly argued that Bankman-Fried made multiple false promises, both internally and externally, and was responsible for billions of dollars in losses to thousands of FTX investors. They emphasized that it is wrong to use FTX clients’ funds without FTX’s knowledge or approval.

As a result, Bankman-Fried will spend a significant amount of time in prison.

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