FTX fraud: Fallen ‘Crypto King’ Samuel Bankman-Fried sentenced to 25 years in prison

Samuel Bankman-Fried, also called SBF, 32, was sentenced by a US courtroom on Thursday (March 28, 2024) to 25 years in prison, three years of supervised launch, and ordered to pay $11 billion in forfeiture for his orchestration of a number of fraudulent schemes.

Bankman-Fried, who was the founding father of the cryptocurrency alternate FTX and the cryptocurrency buying and selling agency Alameda Research, misappropriated billions of {dollars} of buyer funds deposited with FTX, defrauded buyers in FTX of greater than $1.7 billion, and defrauded lenders to Alameda of greater than $1.3 billion.

“Bankman-Fried was beforehand discovered responsible on two counts of wire fraud, two counts of conspiracy to commit wire fraud, one rely of conspiracy to commit securities fraud, one rely of conspiracy to commit commodities fraud, and one rely of conspiracy to commit cash laundering, following a one-month trial earlier than U.S. District Judge Lewis A. Kaplan, who imposed at this time’s sentence,” US Department of Justice stated in a press release.

“There are severe penalties for defrauding prospects and buyers,” stated Attorney General Merrick B. Garland. “Anyone who believes they will cover their monetary crimes behind wealth and energy, or behind a shiny new factor they declare nobody else is wise sufficient to perceive, ought to assume twice. I’m grateful to the U.S. Attorney’s Office for the Southern District of New York and the FBI for his or her excellent work in bringing Mr. Bankman-Fried to justice.”

“The FBI will aggressively examine people, like Samuel Bankman-Fried, who have interaction in fraudulent schemes on the expense of the American public and our monetary methods,” stated FBI Director Christopher Wray. “We are happy with the profitable collaboration that ended this large mismanagement and misappropriation of billions of {dollars}. Today’s sentencing ought to function a warning to others wanting to use fraudulent means for private achieve — there are penalties to your actions.”

“Samuel Bankman-Fried orchestrated one of many largest monetary frauds in historical past, stealing over $8 billion of his prospects’ cash,” stated U.S. Attorney Damian Williams for the Southern District of New York. “His deliberate and ongoing lies demonstrated a brazen disregard for patrons’ expectations and disrespect for the rule of regulation, all in order that he may secretly use his prospects’ cash to broaden his personal energy and affect. The scale of his crimes is measured not simply by the sum of money that was stolen, however by the extraordinary hurt brought about to victims, who in some circumstances had their life financial savings worn out in a single day. As a results of his unprecedented fraud, Bankman-Fried faces 25 years in prison and forfeiture of over $11 billion {dollars}. Today’s sentence will stop the defendant from ever once more committing fraud and is a vital message to others who is likely to be tempted to have interaction in monetary crimes that justice will probably be swift, and the results will probably be extreme.”

Samuel Bankman-Fried was the founder and chief government officer of FTX, a global cryptocurrency alternate. From 2019 to 2022, Bankman-Fried was the chief and mastermind of a scheme to defraud prospects of FTX by misappropriating billions of {dollars} of these prospects’ funds.

Bankman-Fried took FTX buyer funds for his private use, to make investments and hundreds of thousands of {dollars} of political contributions to candidates from each events, and to repay billions of {dollars} in loans owed by Alameda Research, a cryptocurrency buying and selling fund that Bankman-Fried additionally based. Bankman-Fried additionally defrauded lenders to Alameda and fairness buyers in FTX by offering them false and deceptive monetary data that hid his misuse of buyer deposits.

Samuel Bankman-Fried repeatedly informed his prospects, his buyers, and the general public that buyer deposits into FTX had been stored protected and had been held in custody for the purchasers, that buyer deposits had been stored separate from firm property, and that buyer deposits wouldn’t be utilized by FTX.

He additionally repeatedly claimed that his buying and selling firm, Alameda, didn’t have any privileged entry to FTX and didn’t obtain particular remedy from FTX.

Those statements had been false, and Bankman-Fried in truth channeled billions of {dollars} in buyer deposits from FTX to Alameda, after which used these funds to make investments for his personal profit, to make political contributions, and to spend on actual property, amongst different expenditures.

He employed quite a lot of fraudulent means to perpetrate this fraud. For occasion, Bankman-Fried directed co-conspirators to alter FTX’s laptop code to enable Alameda to withdraw successfully limitless quantities of cryptocurrency from the alternate.

Bankman-Fried additionally made false statements to monetary establishments to conceal his misuse of buyer greenback deposits.

And he directed the creation of false monetary statements for Alameda’s lenders, inflated FTX’s revenues and income in numbers supplied to buyers, and backdated contracts and different paperwork to conceal his fraudulent conduct.

Judge Kaplan authorised the federal government to use the funds recovered via the forfeiture course of to present compensation to victims of Bankman-Fried’s crimes.

The FBI investigated the case.

The Southern District of New York’s Securities and Commodities Fraud Task Force, with help from the workplace’s Illicit Finance & Money Laundering and Complex Frauds and Cybercrime Units are dealing with the case. Assistant U.S. Attorneys Nicolas Roos, Danielle Sassoon, Samuel Raymond, Thane Rehn, and Danielle Kudla are prosecuting the case.