On the morning of March 28th, in a downtown Manhattan courtroom, Sam Bankman Freed, a tech genius turned con artist who remained unrepentant despite his trial and conviction, finally learned his fate.
Bankman Fried, who founded the virtual currency exchange FTX, was found guilty on November 2, 2023, of seven counts of wire fraud and money laundering conspiracy.
Fallen Bitcoin booster was found to have siphoned billions of dollars in customer funds to FTX’s sister hedge fund Alameda Research to stay solvent – His pockets were then stuffed with money from unlucky customers, precipitating the organization’s collapse.
“Sam Bankman Freed carried out one of the biggest financial frauds in American history, a multi-billion dollar scheme to make him the king of cryptocurrencies. However, the crypto industry was new and Sam Bankman Players like Bankman Fried may be new, but this type of corruption has been around for a long time,” Manhattan U.S. Attorney Damien Williams said after the conviction. “This case has always been about lies, deceit and theft, and we have no patience for that.”
Prosecutors then asked Judge Lewis Kaplan to impose a prison sentence of 40 to 50 years. They emphasized the “extremely serious nature of the harm to thousands of victims” and said:[prevent] Defendant shall not commit fraud again; [send] This sends a strong signal to those who attempt to engage in financial misconduct that the consequences will be severe. ”
In order to seek a heavier sentence, prosecutors submitted victim impact statements, revealing how individual and institutional investors were harmed by Bankman Freed’s actions.
“In 2022, at the age of 24, I lost all my life savings, which amounted to more than $20,000,” said one person who did not even try to invest in cryptocurrencies, but simply took advantage of the interest rate operated by FTX. I wrote that it was for a reason. – Bearing Savings Account.
Another victim, who said she had “invested a significant portion of her savings in FTX,” said she was staring at an uncertain future, adding: “Immense anxiety, stress and uncertainty about how I'm going to support myself and my family.” “It's causing sex,” he said.
The “disbelief and fear” the victim described upon learning of FTX’s financial crisis reflected the widespread shock at the exchange’s collapse. Bankman Fried has long been a rising star in the crypto world, attracting both investors and politicians with his trading platform.He argued that exchange was safer. – and less risky – than any other such platform. FTX rose to fame on the back of his advocacy, boosting Bankman Freed’s profile and lining his pockets.
FTX is a huge success: SBF became a millionaire before he was 30 years old
Before Bankman Fried turned 30, his fortune was in the billions. FTX and its biggest competitor, Binance, used to process most crypto transactions around the world.
All the while, with his uniform of T-shirts and shorts and lofty philosophical pronouncements, Mr. Bankman-Fried developed the persona befitting the next tech impresario. His parents, both law professors at Stanford University, studied utilitarianism (in effect, the concept that moral actions are those that achieve the greatest good for the greatest number of people), and it was through this context that he learned about commerce. declared that it would evaluate.
Bankman-Fried said he believes in effective altruism. This is a philanthropic endeavor beloved by big tech leaders who believe strategic giving to achieve the greatest number is a virtue. Some proponents of effective altruism promote an “earn to give mentality.” This means that accumulating extreme wealth is moral because it can be donated.
The former mogul's enthusiasm for contributing to society has also permeated politics. He has donated more than $40 million to the 2022 election.
Most of Mr. Bankman Fried’s donations went to the Democratic Party and related committees, but he also poured large sums of money into “dark” contributions to Republican candidates. According to CBS NewsBankman Fried wondered if she might have been the “second or third-largest” donor to the 2022 midterm elections.
While at the top, Bankman Freed chatted with celebrities including Bill Clinton and Tony Blair at the 2020 Cryptocurrency Conference in the Bahamas. He moved FTX to Caribbean countries because it employs a trading mechanism that is prohibited in the United States. new york times report.
Among Bankman Fried’s closest friends was Alameda Research CEO Caroline Ellison. Although their business relationship was complicated, Ellison and Bankman Freed continued an on-and-off romantic relationship over the years.
Like Bankman Freed, Ellison made lofty declarations. “Nothing makes us realize how stupid the normal unmedicated human experience is like regular amphetamine use,” she said in the paper. bomb tweet.
The FTX team's life in the Bahamas seemed to reflect the quirkiness that the tech industry loves. Bankman Freed, Ellison, and eight other members of his entourage lived together in the penthouse. reportedly Access to stimulants – Our in-house clinic will be happy to prescribe it for you.
Everything goes wrong: FTX goes bankrupt, SBF goes to court
Bankman Fried’s fortunes reversed in November 2022. That month, crypto industry publication CoinDesk report He reportedly held billions of dollars in FTT, FTX’s own cryptocurrency. There was a problem because the CEO was using FTT as collateral for a huge loan. When news broke about Binance’s FTT holdings, Binance CEO Changpeng Chao said that the company would dispose of its $500 million FTT holdings due to “recently revealed facts.” FTT plummeted, creating a virtual bank run among customers. FTX, like Alameda Research, sought bankruptcy protection.
It became clear to the outside world that there was an $8 billion hole in FTX’s budget. In December, the U.S. Attorney’s Office in Manhattan charged Bankman Freed with financial crimes for allegedly using customer and investor funds to make risky trades and assist Alameda Research.
At Bankman Freed’s trial in late 2023, the prosecution alleged that Bankman Freed was involved in a malicious fraud from 2019 until November 2022, when FTX went bankrupt. They claim Bankman Freed “misappropriated and misappropriated” FTX customers’ deposits and funneled “billions of stolen dollars” to bloat wallets and fund high-risk investments. did.
Prosecutors also said Bankman Freed shuffled funds to pay for his expensive lifestyle. They say the “exorbitant expenditures” unrelated to FTX covered Mr. Bankman Freed’s personal expenses, including more than $200 million in real estate in the Bahamas, speculative investments and repayments to Alameda’s lenders. said.
During Mr. Bankman-Fried’s month-long trial, his aides took the stand against him. Some of the most damning testimony came from his ex-girlfriend Ellison, who served as the prosecution’s star witness.
“Did you commit any crimes while working in Alameda?” Ellison was asked. She answered: “Yes, I did…” [Bankman-Fried] directed me to commit these crimes. ”
Despite numerous revelations about FTX’s questionable internal affairs, Bankman Fried made the shocking decision to testify in his own defense. “I made a lot of little mistakes and I made a lot of big mistakes,” Bankman Freed told jurors. “There was a serious oversight.”
Bankman Freed made management errors, including failing to establish a dedicated risk management team. But when attorney Mark Cohen asked if he had defrauded his clients or stolen their money, Bankman Fried responded, “No, I didn’t.”
When it came time for the prosecution to cross-examine Bankman-Fried, the lawyers questioned him on everything from his character. Mr Ellison told jurors that his appearance as limp and bedridden was an act and that he drove a Toyota Corolla as part of his branding. – Discrepancies between FTX’s public and private announcements.
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“Mr. Bankman Freed, do you agree that you know how to tell a good story?” asked prosecutor Daniel Sassoon. “I don’t know. It depends on what metrics you use,” he said, without giving a direct answer.
Mr. Sassoon asked about his colleague’s comments. new york timesIn it, Ms. Bankman-Fried claimed that she considered cutting her hair to have negative value because, “I think it’s important that people think I’m crazy.“ From.“ “I don’t think I meant that,” Bankman Fried said.
“Do you consider yourself an intelligent man?” Sassoon pressed.
“Not in all respects, but in many respects,” Bankman-Fried said.
“As CEO of FTX, did you think highly of yourself?”
“Hooray.”
Unrepentant SBF faces decades in prison
During Bankman Freed’s trial, his lawyers pressed him to portray him as a “math nerd who doesn’t drink or party” and is crazy. Prosecutors pushed back against the baby-in-the-woods argument during sentencing submissions, pointing out that he hardly led a life of hardship.
“With all the advantages afforded by a comfortable upbringing, an education at MIT, a prestigious start to a career in finance, and a worthy idea for a start-up business, Bankman Fried was able to achieve the rewards he envisioned.“ “He could have pursued a productive and altruistic life,” they said.
“Rather, his life in recent years has been one of unparalleled greed and arrogance: ambition and rationalization, risk-seeking and repeated gambling with other people’s money.”
In response, Bankman Fried’s team painted him as a victim, writing that prosecutors presented their version of him as a “depraved supervillain.” [with] Dark and megalomaniac motives. ”
“The government seeks to complete the sentence of 32-year-old Sam Bankman Freed,” his attorneys wrote in a statement regarding prosecutors’ 40 to 50-year sentence. “There’s no need to crush Sam like this.”
They, too, suggested a sentence ranging from 63 to 78 months, citing his elite education.
“Offenders with no criminal history, like Sam, are the least likely to reoffend,” they said. “And college-educated offenders are less likely to reoffend.”
In a February petition seeking a reduced sentence, Bankman Fried said there was “zero harm to customers, lenders and investors…The company was solvent at the time of the bankruptcy filing…The money was there.” “It is not lost.”
John Ray, who was appointed FTX CEO to oversee the bankruptcy, denounced Bankman Freed’s claims in a court filing.
“Mr. Bankman Freed continues to live a life of delusion. The ‘business’ he left on November 11, 2022 was neither solvent nor secure. “A large amount of money was stolen by Mr. Bankman Freed,” Ray wrote.
It seems unlikely that they will receive lenient treatment.
Neema Rahmani, president of the West Coast Trial Lawyers Association and a former federal prosecutor, said Bankman Freed “will serve a significant prison term.”
“He refused to accept responsibility and tried to shift the blame onto others. This is one of the greatest
Source: www.theguardian.com
