‘Crypto king, champ, whiz’… whatever you might choose to call him, the glory days of the once much-applauded co-founder of crypto exchange FTX, Sam Bankman-Fried, are well and truly over.
Hero of the crypto world, the quirky billionaire with a mop of curly hair, casually dressed most of the time in shorts and a T-shirt, was sentenced to 25 years in prison for fraud by a New York court.
The man who built up a huge fan base by mouthing feel-good mantras of giving away one’s wealth to charity – to see it all slip away from his fingers – is just 32 years old.
FTX, the company he co-founded, grew to be the world’s largest crypto exchange for buying and trading in cryptocurrency before it collapsed in 2022.
Things started to go wrong when rumours surfaced of FTX affiliated firm Alameda Research deriving most of its value from speculative cryptocurrency tokens. It sent investors scrambling to withdraw their deposits.
The crypto market lost its $1 trillion valuation overnight as both FTX and Alameda Research went bankrupt.
Civil and criminal charges were brought against Bankman-Fried and top executives by the US government in December 2022. He was tried in October 2023 and convicted in November 2023 on charges of stealing from customers who put money in FTX accounts and lying to investors and creditors.
About $8 billion in customer funds were misappropriated even as prosecutors levelled charges at him of living a luxurious life in the Bahamas, investing in other companies and trying his hand at political lobbying.
As Judge Lewis Kaplan summed it up before Bankman-Fried’s sentencing at the New York court on Thursday, March 28: he had lied during his testimony on trial about not knowing his companies were taking money entrusted to them by their customers.
Though he knew it was wrong, “he knew it was criminal, He regrets that he made a very bad bet about the likelihood of getting caught but he's not going to admit a thing," the judge said.
There was no "word of remorse for the commission of terrible crimes."
For a 32-year-old, 25 years in prison seems like a lifetime, but it’s much less than the 100 years he would have received otherwise if government guidelines had been followed.
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