Disgraced crypto mogul Sam Bankman-Fried, on Thursday, has been sentenced to 25 years in prison for his role in the 2022 collapse of FTX, once one of the world's most popular platforms for trading digital currency.
A jury had found that he illegally used money from FTX depositors to cover his expenses, which included purchasing luxury properties in the Caribbean, alleged bribes to Chinese officials and a private plane, and prosecutors have recommended a prison sentence of 40 to 50 years.
"A lot of people feel really let down, and they were very let down, and I am sorry about that. I am sorry about what happened at every stage. And there are things I should've done and things I shouldn't have," Bankman-Fried said during the hearing of what is being billed as one of the biggest financial frauds in US history.
He told the court that he is pained to see FTX's customers suffer. "It's been excruciating to watch. Customers don't deserve any of that pain. Bankman-Fried admitted that as CEO of FTX, he was responsible for causing that pain. He also acknowledged that he made a series of bad decisions.
As he is staring at a lengthy prison sentence, he said, "My useful life is probably over. It's been over for a while now."
"The defendant victimised tens of thousands of people and companies, across several continents, over a period of multiple years. He stole money from customers who entrusted it to him; he lied to investors; he sent fabricated documents to lenders; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials. Each of these crimes is worthy of a lengthy sentence," prosecutors told Judge Lewis A. Kaplan in a court filing.
The FTX fraud
Bankman-Fried was worth billions of dollars on paper as the co-founder and CEO of FTX, which was the second-largest cryptocurrency exchange in the world at one time.
FTX allowed investors to buy dozens of virtual currencies, from Bitcoin to more obscure ones like Shiba Inu Coin. Flush with billions of dollars of investors' cash, Bankman-Fried took out a Super Bowl advertisement to promote his business and bought the naming rights to an arena in Miami.
But the collapse of cryptocurrency prices in 2022 took its toll on FTX, and ultimately led to its downfall. FTX's hedge fund affiliate, known as Alameda Research, had bought billions of dollars of various crypto investments that lost considerable amounts of value in 2022. Bankman-Fried tried to plug the holes in Alameda's balance sheet with FTX customer funds.
Three other people from Bankman-Fried's inner circle, including his former girlfriend, Caroline Ellison, pleaded guilty to related crimes and testified at his trial.
—With agency inputs
