Prominent cryptocurrency entrepreneur Sam Bankman-Fried was sentenced to 25 years in prison on Thursday (March 28) for massive fraud. Its fraud scam unraveled with the collapse of the digital currency exchange platform FTX. FTX was once one of the most popular digital currency exchange platforms in the world.
Sam Bankman-Fried, 32, fell from stardom after being found guilty of fraud and conspiracy in November. He has appeared in Super Bowl commercials and has been endorsed by American football quarterback Tom Brady, basketball star Stephen Curry, and comedian Larry David, and other celebrities and celebrity endorsements.
Federal District Court Judge Lewis A. Kaplan handed down the sentence in a Manhattan courtroom. Four months ago, Bankman-Fried testified in the same court that his intention was to revolutionize the emerging cryptocurrency market with his innovative and altruistic ideas, not to steal.
Kaplan said the sentence reflected “the risk that this person could be in a position to do something very evil in the future. And that’s by no means a trivial risk.” He added that it was “for incapacitate him for a substantial period of time and to the extent permitted to be appropriate.”
Before the sentence was announced, Sam Bankman-Fried said, “My useful life may be over. It has been over for some time, starting before I was arrested.”
Prosecutors say Sam Bankman-Fried misappropriated billions of dollars to advance his quest for influence and dominance in new industries, costing customers, investors, and lenders more than $10 billion. He also illegally used funds from FTX depositors to pay for his own expenses, including purchasing luxury homes in the Caribbean, allegedly bribing Chinese officials, and purchasing private jets.
Bankman-Fried is the co-founder and CEO of FTX, which was once worth billions of dollars. FTX was at one time the second-largest cryptocurrency exchange in the world.
FTX allows investors to purchase dozens of virtual currencies, from the well-known Bitcoin to unknown virtual currencies such as Shiba Inu Coin. Bankman-Fried, armed with billions in investor cash, took out Super Bowl ads to promote his business and bought the naming rights to an arena in Miami.
However, the collapse in cryptocurrency prices in 2022 took its toll on FTX and ultimately led to its downfall. FTX’s hedge fund affiliate, Alameda Research, previously purchased billions of dollars in various cryptocurrency investments that lost significant amounts of value in 2022.
Bankman-Fried sought to plug holes in Alameda Research’s balance sheet with FTX client funds.
Three others in Bankman-Fried’s inner circle have pleaded guilty to related crimes and testified at his trial.
The most famous of the three is Caroline Ellison, who was once Sam Bankman-Fried’s girlfriend. Ellison described Bankman-Fried as a calculating man who knew he was likely committing a crime when he directed the use of client funds. Two other former friends of Bankman-Fried, Gary Wang and Nishad Singh, also testified that they felt Bankman-Fried directed them to carry out the Fraudulent.
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