Crypto-Criminal Learns His Fate After Defrauding Customers of Billions

( – Sam Bankman-Fried made a name for himself as a crypto genius. His cryptocurrency exchange, Futures Exchange (FTX), and hedge fund Alameda Research were allegedly worth billions of dollars a few years ago. But prosecutors proved that it was all a farce, and the alleged genius was accused of being a scam artist. Now, he’s going to spend more than two decades in jail and has to repay billions.

Sentence Handed Down

On March 28, the Department of Justice announced that Bankman-Fried received a 25-year sentence and three years of supervised release. US District Judge Lewis A. Kaplan also ordered the defendant to pay $11 billion in forfeiture.

Bankman-Fried received the sentence after being convicted of misappropriating billions of dollars in funds that were deposited in FTX. He also defrauded Alameda lenders of over $1.3 billion and FTX investors of over $1.7 billion. The former CEO was also convicted of conspiracy to commit wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, wire fraud, and conspiracy to commit money laundering.

Kaplan accused the defendant of not taking responsibility for the disaster he created through his fraudulent behavior. The judge said that while the former CEO said “mistakes were made,” he never said a “word of remorse for the commission of terrible crimes.” He also said the chance Bankman-Fried would commit crimes in the future was “not a trivial risk.”

The judge did give him a break, though, allowing him to serve his sentence at a low- or medium-security prison in the San Francisco Bay Area, near his parents.

Marc Mukasey, the defendant’s lawyer, asked people not to compare his client to the scammer of the century, Bernie Madoff, because he wasn’t a “ruthless financial serial killer” like the late Ponzi schemer was. He alleged Bankman-Fried made all of his decisions with “math in his head,” not “malice in his heart.”

The defendant spoke to the court and admitted he made bad decisions but claimed he wasn’t being selfish.

The Case

In 2022, FTX quickly fell apart and declared bankruptcy. Federal investigators looked into the operation and said it was fraud disguised as a breakthrough financial innovation. Bankman-Fried reportedly used client funds to donate to political causes, purchase luxury real estate, and invest. He and his employees also took money that people invested into the hedge fund and funneled it into FTX.

Prosecutor Nicolas Roo told the court, “The criminality here, it’s massive in scale.”

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