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Former "Cryptocurrency King" sentenced to 25 years, how did he fall from grace?
From the former "Cryptocurrency King" to the current convicted felon, Sam Bankman-Fried, founder of the American cryptocurrency exchange FTX, was sentenced to 25 years in prison in New York City on March 28 for embezzling $8 billion from FTX customers. This once again witnessed the downfall of the former "big shot" in the crypto world and the collapse of a financial myth.
The judge said he showed no remorse
On March 28th local time, the Manhattan Federal Court handed down a sentence of 25 years in prison. This sentence was lower than the 40 to 50 years in prison proposed by federal prosecutors but much higher than the approximately 6 and a half years suggested by Bankman-Fried's lawyer. Bankman-Fried will also have $11 billion in assets confiscated.
Bankman-Fried, now 32, showed no visible reaction when the sentence was announced. He plans to appeal his conviction and sentence.
Before delivering the sentence, U.S. District Judge Lewis Kaplan rejected Bankman-Fried's claims that FTX customers had not actually lost money and accused him of lying in his trial testimony.
"He knew this was criminal conduct," Judge Kaplan said, but Bankman-Fried's testimony showed no signs of remorse. He also said Bankman-Fried was extremely keen on taking extremely dangerous risks, which was his "nature". If left unchecked, he would continue to do very bad things in the future.
Before the judge's ruling, Bankman-Fried apologized to FTX customers, investors, and employees. "Many people are very disappointed. I am sorry for everything that has happened at each stage," he said. He also said that his employees had put in a lot of effort, but he had thrown it all away.
It is reported that three close friends in Bankman-Fried's inner circle have pleaded guilty to related crimes and testified against Bankman-Fried in his trial, blaming him for the wrongdoing. Among them, the most prominent witness was Caroline Ellison, who supervised FTX's sister company Alameda Research and is also Bankman-Fried's former girlfriend. Ellison testified during the trial that Bankman-Fried was aware of the criminal conduct and instructed her to commit crimes.
Bankman-Fried's parents issued a statement after the ruling, saying they were heartbroken and "will continue to fight for their son". It is reported that both of his parents were renowned professors at Stanford Law School.
In November of last year, a Manhattan federal jury found Bankman-Fried guilty of seven counts of federal fraud and conspiracy. U.S. prosecutors accused him of "orchestrating a years-long, large-scale scheme to misappropriate billions of dollars in customer funds from the trading platform for his personal benefit and to help build his cryptocurrency empire."
Prosecutors said the case was one of the largest financial fraud cases in U.S. history.
How did he fall from grace?
Public opinion believes that the latest court ruling marks the end of this large-scale fraud case and also signals the complete downfall of Bankman-Fried, once a rising star.
From being the undisputed "Cryptocurrency King" to becoming an ostracized prisoner, what has this 32-year-old former billionaire experienced in recent years?
Bankman-Fried was born in 1992. After graduating from the Massachusetts Institute of Technology, he joined a quantitative trading firm on Wall Street.
In 2017, Bankman-Fried keenly sensed the business opportunities in the cryptocurrency field. He resigned decisively and founded Alameda Research. In 2019, after discovering the huge arbitrage space in the virtual currency market, he founded the FTX trading platform, which features derivative trading.
With the rapid development of the cryptocurrency industry, Bankman-Fried's wealth soared rapidly. In December 2021, he was listed on Forbes' billionaire list with a net worth of $26 billion, being dubbed as "big shot" in the crypto world, "the richest genius after 90s", and even hailed as "the next Warren Buffett".
Bankman-Fried used to frequently appear on magazine covers and had close relationships with celebrities, models, and athletes. He also created an image of being "altruistic and generous", claiming to make more money just to donate it to help more people. However, he never concealed his huge spending on travel and luxury homes with friends.
In the 2020 U.S. presidential election, Bankman-Fried was also the second-largest donor to the Democratic Party, reportedly donating $5 million to President Biden's campaign. There are also claims that he provided funds to candidates from both parties in order to exert influence in the cryptocurrency industry regardless of who won the election.
However, everything took a turn for the worse in the second half of 2022.
In the fall of 2022, two companies founded by Bankman-Fried were exposed by the media for colluding to manipulate trading and make improper profits.
At the end of that year, a wave of customer withdrawals revealed once again that $8 billion in deposits in FTX accounts had been misappropriated. The company's funding chain broke, and it applied for bankruptcy protection, leaving many investors with heavy losses.
Bankman-Fried quickly resigned as CEO of FTX. However, he was soon arrested at his mansion in the Bahamas and faced more than a dozen federal criminal charges, including fraud, money laundering, and violations of campaign finance laws. In November 2023, he was convicted of seven federal fraud and conspiracy charges.
What lies ahead for him?
In the first half of his 32-year life, Bankman-Fried clearly experienced unimaginable ups and downs. What awaits him in the second half of his life?
Bankman-Fried appears somewhat pessimistic about this. In the "remorse" phase before the judgment, he said, "My useful time in this life may be over."
Analysts say that Bankman-Fried's sentence is relatively long in U.S. financial fraud cases.
For example, Holmes, founder of the U.S. company Theranos, who claimed to be able to "diagnose cancer with a drop of blood", was sentenced to 11 years and 3 months in prison for defrauding investors, half of Bankman-Fried's sentence. However, in the largest Ponzi scheme in history 20 years ago, the mastermind Madoff was sentenced to 150 years in prison in 2009 for 11 charges. He died 12 years after being imprisoned.
Madoff's defense lawyer at the time, Ira Lee Sorkin, said Bankman-Fried's heavy sentence was not surprising, and he "will be in prison for a long time".
However, he believes that compared to his client, Bankman-Fried does not need to be so pessimistic because "at least he can see the light of day again". |
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Post time 10-4-2024 12:57:53