Ex-crypto mogul Sam Bankman-Fried due to be sentenced for defrauding FTX

The 32-year-old illegally used money from depositors of one of the world’s most popular platforms for trading digital currency to cover his expenses.

FTX founder Sam Bankman-Fried leaves Manhattan federal court in New York [File: John Minchillo/AP]Published On 28 Mar 202428 Mar 2024

Former crypto mogul Sam Bankman-Fried is due to be sentenced for his role in the 2022 collapse of FTX, once one of the world’s most popular platforms for trading digital currency.

Bankman-Fried, 32, was convicted last November of fraud and conspiracy by a jury that found that he illegally used money from FTX depositors to cover his expenses, which included purchasing luxury properties in the Caribbean, alleged bribes to Chinese officials and private planes.

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He will return to a New York court on Thursday.

Prosecutors have recommended a prison sentence of 40 to 50 years.

“The defendant victimised tens of thousands of people and companies, across several continents, over a period of multiple years,” prosecutors told Judge Lewis Kaplan in a court filing.

“He stole money from customers who entrusted it to him; he lied to investors; he sent fabricated documents to lenders; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials. Each of these crimes is worthy of a lengthy sentence,” they added.

Bankman-Fried’s lawyers, friends and family have urged leniency, saying he is unlikely to reoffend. They also say FTX’s investors have largely recovered their funds – a claim disputed by bankruptcy lawyers, FTX and its creditors.

“Mr Bankman-Fried continues to live a life of delusion,” wrote John Ray, who was appointed CEO of FTX after its collapse and had to clean up the bankrupt company. “The ‘business’ he left on November 11, 2022 was neither solvent nor safe.”

Two weeks ago, Bankman-Fried’s lawyer Marc Mukasey slammed a probation office recommendation of 100 years in prison, saying a sentence of that length would be “grotesque” and “barbaric”.

He urged the judge to sentence Bankman-Fried to a term of five to six and a half years in prison.

“Sam is not the ‘evil genius’ depicted in the media or the greedy villain described at trial,” Mukasey said, calling his client a “first-time, non-violent offender”.

Flushing billions

Bankman-Fried was worth billions of dollars on paper as the co-founder and CEO of FTX, which was the second-largest cryptocurrency exchange in the world at one time.

FTX allowed investors to buy dozens of virtual currencies, from Bitcoin to more obscure ones like Shiba Inu Coin. Flush with billions in investors’ cash, Bankman-Fried took out a Super Bowl advertisement to promote his business and bought the naming rights to an arena in Miami.

But the collapse of cryptocurrency prices in 2022 took its toll on FTX, and ultimately led to its downfall.

Source: News Agencies