Former cryptocurrency tycoon Sam Bankman-Fried has been handed a 25-year prison sentence for his involvement in one of the biggest financial scandals in U.S. history.
Bankman-Fried, aged 32, was found guilty in November on multiple charges including fraud, conspiracy, money laundering, commodities, and securities fraud.
Despite facing a potential 110-year sentence as per federal guidelines, prosecutors pushed for a 40 to 50-year term, citing the severity of the crimes. In contrast, Bankman-Fried's defense team argued for a maximum of six and a half years, claiming he posed a low risk of reoffending.
Despite Bankman-Fried's plans to appeal his conviction, former federal prosecutor Andrey Spektor has expressed doubts about the possibility of the verdict being overturned. "There is nothing anyone can do about that," Spektor stated.
Following the shocking collapse of FTX in 2022, Bankman-Fried was convicted last fall for his involvement in the cryptocurrency trading platform he co-founded. The collapse revealed an $8 billion deficit in funds. During the trial, he was accused of using customer deposits to support his failing hedge fund and of using the money to purchase luxury properties in the Caribbean and make charitable donations.
At its peak, FTX was the second-largest crypto exchange globally, facilitating the trading of numerous virtual currencies. Bankman-Fried's personal wealth was estimated to exceed $30 billion. With substantial investor funds at his disposal, he even aired a Super Bowl advertisement to promote FTX and acquired naming rights to an arena utilized by the NBA's Miami Heat.
Amid the cryptocurrency price crash of 2022, FTX faced a devastating blow that ultimately caused its downfall. The hedge fund partner of FTX, Alameda Research, suffered significant losses on their crypto investments, leading to financial turmoil. Allegations from prosecutors suggested that Bankman-Fried, in an attempt to stabilize Alameda's finances, resorted to using FTX customer funds.
During the legal proceedings, three ex-FTX colleagues testified against Bankman-Fried, having pleaded guilty to associated offenses. Among them was Caroline Ellison, a former romantic partner of Bankman-Fried, who claimed that he had coerced her into participating in fraudulent activities.
