Bankman-Fried Sentenced in Fraud Trial

( – Eighteen months ago, Sam Bankman-Fried was a poster boy for the cryptocurrency industry. Still in his 20s, he was the perfect example of a liberal, socially conscious entrepreneur. Behind the scenes, though, he was running a massive scam — and in December 2022 he was arrested on fraud charges. In November of 2023, he was convicted on all counts. Now he’s been sentenced to serious prison time.

The Rise and Fall of SBF

Sam Bankman-Fried — often known as SBF — started his financial career in 2013 as a 21-year-old student intern at trading firm Jane Street Capital. After graduation, he went to work there full-time and began building his leftist credentials by giving half his salary to charity. By 2018 he was making multimillion-dollar cryptocurrency transactions, and the next year he founded a specialist crypto exchange, FTX.

Over the next three years, Bankman-Fried’s public image grew relentlessly, partly because of his youth and partly thanks to his promotion of the Effective Altruism movement and his massive donations to liberal political campaigns. However, in November 2022 Binance, a major investor in FTX, announced it would sell its holdings in the exchange, reportedly because its CEO Changpeng Zhao was fed up with Bankman-Fried’s behavior. Just four days later, FTX and over 130 associated companies and other entities declared bankruptcy.

As financial experts went through the rubble of FTX, it became obvious that Bankman-Fried had defrauded his customers of billions of dollars. He was arrested in the Bahamas on December 12 and extradited back to the US. The same day, the US District Court for the Southern District of New York charged him with wire fraud, securities fraud, money laundering, and conspiracy. He pleaded not guilty to all the charges and was bailed on a record-breaking $250 million bond — but in August 2023 his bail was revoked after prosecutors accused him of witness tampering.

Bankman-Fried’s trial began on October 23, 2023, and lasted a month; on November 2 the jury found him guilty on all seven counts. On March 28 he returned to court for his sentencing hearing. His legal team called for a sentence of, at most, six and a half years; prosecutors wanted 50, and US Attorney Damian Williams explained why — Bankman-Fried was guilty of one of the largest frauds in history. Williams argued that a long sentence was needed to make sure he didn’t do it again, and to send a message to others in the financial industry.

In the end, Judge Lewis Kaplan split the difference and sentenced Bankman-Fried to 25 years in prison.

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