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Fallen Crypto King Sam Bankman-Fried Gets 25 Years for FTX Fraud

Disgraced crypto entrepreneur Sam Bankman-Fried, once hailed as a visionary, was sentenced to 25 years in prison last week for a colossal fraud that crippled his cryptocurrency exchange FTX and robbed hundreds of thousands of investors.

US District Judge Lewis Kaplan called the crimes a “massive fraud” that “wreaked havoc on a nascent industry.”

Mr Bankman-Fried, better known by his initials SBF, was convicted in November on eight counts, including wire fraud, securities fraud, and money laundering.

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Prosecutors argued that SBF misused billions of dollars in customer funds to prop up his hedge fund, Alameda Research, and line his own pockets.

The collapse of FTX last year sent shockwaves through the cryptocurrency world, wiping out billions of dollars in investments and raising serious questions about regulation.

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During the sentencing hearing, Judge Kaplan rejected SBF’s claims of innocence and accused him of perjury during his trial.

The judge said SBF’s actions posed a “significant risk” of future harm and that a lengthy sentence was necessary to deter others.

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This sentencing marks the culmination of Bankman-Fried’s transformation from a wealthy entrepreneur and political donor to a symbol of misconduct in the crypto industry.

U.S. Attorney Damian Williams condemned Bankman-Fried’s actions, highlighting his disregard for customer trust and the law.

The trial revealed that FTX customers lost a staggering $8 billion, alongside significant losses for equity investors and lenders to Bankman-Fried’s hedge fund, Alameda Research.

Prosecutors sought a harsher sentence, while Bankman-Fried’s defense portrayed him as a diligent but misguided individual, not a malicious criminal.

His defense emphasized his mathematical background and decision-making based on calculations, not ill-intent. However, the judge saw through this defense, acknowledging the severity of Bankman-Fried’s actions and their devastating consequences.

The courtroom witnessed the heartbreak of Bankman-Fried’s parents, Stanford law professors Joseph Bankman and Barbara Fried, as they faced the harsh reality of their son’s downfall.

Bankman-Fried’s story is one of meteoric rise and swift collapse. Once a celebrated MIT graduate and cryptocurrency tycoon with a net worth of $26 billion, he now faces a lengthy prison term and a shattered reputation.

His past commitment to effective altruism and Democratic causes stands in stark contrast to his present conviction for fraud.

Since his arrest in August 2023, Bankman-Fried has been held at the Metropolitan Detention Center in Brooklyn. The judge recommended his transfer to a prison closer to his San Francisco roots.

The sentence marks a significant turning point for the cryptocurrency industry, sending a clear message that fraud will be prosecuted to the fullest extent of the law.

Diana Mutheu
Diana Mutheu
Diana Mutheu is a Tech enthusiast, happy to delve deeper into the African tech space covering Social Media, AI, Startups, Telcos, Cryptocurrency, Big Data, Women in Tech and all matters Tech.

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