Sam Bankman-Fried’s Sentencing Has Been Announced

MetaversePlanet March 29, 2024Last Updated: March 29, 2024

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Sam Bankman-Fried, the founder of FTX, a cryptocurrency exchange that collapsed in 2022 resulting in billions of dollars in losses for its investors, has been sentenced. Facing charges across seven separate counts of money laundering and fraud, Fried has been sentenced to 25 years in prison.

FTX, once among the world’s largest cryptocurrency exchanges, imploded in late 2022, wiping out billions of dollars for its users. Sam Bankman-Fried, once celebrated as the “golden boy” of crypto, was arrested and held accountable for the collapse. Having spent some time in custody, the trial of Fried was in progress.

The case has now reached a conclusion, with the sentencing of the notable entrepreneur being officially announced. On seven counts of fraud and money laundering, Fried has been sentenced to prison.

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Sam Bankman-Fried, who was asked to serve 110 years in prison, was sentenced to 25 years in prison

Judge Lewis Kaplan sentenced Fried to 25 years in prison during a 4-hour hearing in New York today. Despite the 32-year-old entrepreneur’s denial of all charges, a 12-member jury found him guilty of defrauding his users and misappropriating their funds.

Under normal circumstances, Sam Bankman-Fried could have faced up to 110 years in prison. The prosecutors had recommended a sentence between 40 and 50 years. Conversely, Fried’s defense team suggested a term of 5 to 6 years. Ultimately, a sentence totaling 240 plus 60 months was determined.

Investors lost $8 billion

Bankman founded FTX in 2019, and in a short span, the exchange rapidly ascended to become one of the world’s leading platforms in the sector. However, by November 2022, it began to crumble due to issues like liquidity crises and mismanagement of funds, eventually declaring bankruptcy. During the trial, witnesses revealed that FTX manipulated figures to appear more financially secure than it was. Further, it came to light that Fried had afforded secret advantages to his own firm, Alameda Research, revealing that this ostensibly independent entity heavily relied on the exchange’s proprietary token, FTT.

These revelations led to significant losses for investors. Users faced an $8 billion loss, while the company’s investors incurred a $1.7 billion loss. Consequently, Fried was convicted of fraud and money laundering.