- Cryptocurrency fraudster to be sentenced for his crimes
- Contrasting numbers: prosecutors ask for at least 40 while defense team expects not more than 10
- How did SBF get here, and how is FTX now?
Cryptocurrency fraudster to be sentenced for his crimes
The story of FTX's fall comes to a long-awaited end. Soon. Cryptocurrency billionaire, a CEO with a simple grey T-shirt, Sam Bankman-Fried, or just SBF faces his fate this week. He was convicted of fraud and money laundering last year, and now the former billionaire will appear in court again to get his sentencing.
It is certain that the 32-year-old will be going to prison. The question is for how long. Prosecutors push at least 40 years, and he faces up to 50 years in prison. His legal team, however, has called for leniency and expects to lower the period to 6 and a half[1].
Prosecutors argue that the sentencing should be way higher than that because SBF lied to investors and banks and stole billions in deposits from customers of his now-bankrupt crypto exchange company, FTX. Cryptocurrency exchanges and their leaders like SBF or CZ from Binance face tough times.
Contrasting numbers: prosecutors ask for at least 40 while defense team expects not more than 10
SBF was found guilty just five months ago. The former Crypto King committed one of the largest white-collar crimes in history. The fall of his company, the behavior of his former friends and colleagues, and the SBF hide-out were the top topics for many months.
After the extradition and multiple court appearances, the story ends here. His legal team suggests he should only get five to 6.5 years in jail. They think the government wants a harsh punishment, like in old times, for a crime that didn't involve violence, and it's his first offense[2].
There are many conflicting opinions, with some calling this cryptocurrency mastermind a fraudster and claiming that he planned his fraud and money laundering on purpose. Others think that all the claims that SBF was not aware of the consequences were true and that 40 years in prison is too much for such a crime, even though billions were lost.
Big decision in court's hands now. Many people, including those who lost money on FTX, his family, and others who don't even know him personally, have written lots of letters to Judge Lewis Kaplan. He's the judge who will decide what happens to him.
Sunil Kavuri, a British investor who lost more than $2 million on the exchange, said, "He doesn't seem sorry at all, so why should the judge be lenient?" Kavuri also encourages others who have lost money to tell the court about their experiences.
How did SBF get here, and how is FTX now?
In 2022, the cryptocurrency exchange FTX dramatically failed, shocking many as its founder, Bankman-Fried, went from being a celebrated billionaire to facing serious charges. FTX had become very popular, drawing in millions of users to trade digital currencies, until rumors of financial instability led to a sudden withdrawal of funds by many customers.
By November 2023, a jury in the United States concluded that S. Bankman-Fried had illegally taken billions of dollars from FTX to spend on things like real estate, political contributions, and other investments. Despite this, there's a chance for many FTX users to get some of their money back through a bankruptcy case that's being handled separately[3].
This plan suggests that former FTX users might be compensated based on the value of their accounts at the time of the company's downfall. Bankman-Fried's lawyers, expecting him to challenge his guilty verdict, argue that the possibility of repayment should lead to a reduced sentence. They claim that if funds are being returned, it shows that the money wasn't simply taken for personal use by Bankman-Fried.
However, this proposed solution has upset many former users because it doesn't account for the gains they missed as cryptocurrencies recovered in value. John Ray, who's overseeing FTX's bankruptcy, shared these concerns in a court letter, emphasizing that many people have suffered significant losses. The company got the opportunity to repay some of the creditors.
However, there were no happy people out of those involved with FTX. Some of those affected have spoken out against any leniency for Bankman-Fried. Arush Sehgal and Angela Chang, who lost substantial amounts with FTX, have voiced their frustrations, highlighting the personal and financial toll. Sehgal, who is taking legal action against the current bankruptcy proposal, describes it as a further injustice.
Legal experts like Daniel Richman of Columbia Law School note that the complexity of this case is unusual, with many factors influencing the final sentencing decision, including the judge's personal view of the defendant and considerations about preventing future offenses.
Judge Kaplan, experienced and has handled many high-profile cases, has already shown skepticism towards SBF by revoking his bail previously. Richman suggests that for Bankman-Fried, showing genuine remorse and an understanding of his wrongdoings could have been advantageous, but his actions before the trial haven't favored him in this regard.
The expectation is that Judge Kaplan's sentencing will likely be much harsher than what Bankman-Fried's defense hopes for. It seems that the so-called Golden Boy will inevitably become a man in jail.
