Dethroned crypto king Sam Bankman-Fried to be sentenced for defrauding FTX investors

By KEN SWEET and LARRY NEUMEISTER (Related Press)

NEW YORK (AP) — Former crypto mogul Sam Bankman-Fried faces the potential of many years in jail when he’s sentenced Thursday for his position within the 2022 collapse of FTX, as soon as one of many world’s hottest platforms for buying and selling digital forex.

Bankman-Fried, 32, was convicted in November of fraud and conspiracy — a dramatic fall from a yr earlier when he and his corporations appeared to be driving a crest of success that resulted in a Tremendous Bowl commercial and celeb endorsements from stars like quarterback Tom Brady and comic Larry David.

A jury discovered that Bankman-Fried illegally used cash from FTX depositors to cowl his bills, which included buying luxurious properties within the Caribbean, alleged bribes to Chinese language officers and personal planes.

Prosecutors really helpful a jail sentence of 40 to 50 years.

“The defendant victimized tens of 1000’s of individuals and corporations, throughout a number of continents, over a interval of a number of years. He stole cash from prospects who entrusted it to him; he lied to buyers; he despatched fabricated paperwork to lenders; he pumped tens of millions of {dollars} in unlawful donations into our political system; and he bribed international officers. Every of those crimes is worthy of a prolonged sentence,” prosecutors informed Choose Lewis A. Kaplan in a courtroom submitting.

Bankman-Fried’s attorneys, family and friends have urged leniency, saying he’s unlikely to reoffend once more. Additionally they say FTX’s buyers have largely recovered their funds — a declare disputed by chapter attorneys, FTX and its collectors.

“Mr. Bankman-Fried continues to reside a lifetime of delusion,” wrote John Ray, the CEO of FTX who has been cleansing up the bankrupt firm. “The ‘enterprise’ he left on November 11, 2022 was neither solvent nor protected.”

Two weeks in the past, Bankman-Fried lawyer Marc Mukasey attacked a probation workplace suggestion of 100 years in jail, saying a sentence of that size could be “grotesque” and “barbaric.”

He urged the decide to condemn Bankman-Fried to a time period of 5 to six 1/2 years in jail.

“Sam is just not the ‘evil genius’ depicted within the media or the grasping villain described at trial,” Mukasey mentioned, calling his shopper a “first-time, non-violent offender.”

Bankman-Fried was price billions of {dollars} on paper because the co-founder and CEO of FTX, which was the second-largest cryptocurrency alternate on the planet at one time.

FTX allowed buyers to purchase dozens of digital currencies, from Bitcoin to extra obscure ones like Shiba Inu Coin. Flush with billions of {dollars} of buyers’ money, Bankman-Fried took out a Tremendous Bowl commercial to advertise his enterprise and purchased the naming rights to an area in Miami.

However the collapse of cryptocurrency costs in 2022 took its toll on FTX, and in the end led to its downfall. FTX’s hedge fund affiliate, often called Alameda Analysis, had purchased billions of {dollars} of varied crypto investments that misplaced appreciable quantities of worth in 2022. Bankman-Fried tried to plug the holes in Alameda’s steadiness sheet with FTX buyer funds.

Three different folks from Bankman-Fried’s inside circle pleaded responsible to associated crimes and testified at his trial.

The largest title among the many three was Caroline Ellison, as soon as the girlfriend of Bankman-Fried. Ellison described Bankman-Fried as a calculating particular person who knew that he was possible committing crimes when he directed using buyer funds. Two different onetime mates of Bankman-Fried, Gary Wang and Nishad Singh, additionally testified they felt they had been directed by Bankman-Fried to commit fraud.