By: Ethan Erickson Edited by: Shane Masterson November 20, 2023
Sam Bankman-Fried was recently charged with seven criminal counts, including conspiracy to commit securities fraud, commodities fraud, money laundering, and wire fraud. On November 2nd, he was found guilty of all seven. The maximum sentence he can receive is 110 years in federal prison, and Judge Lewis Kaplan will deliver a sentence in March of 2024.
Bankman-Fried was the founder of FTX, a cryptocurrency exchange that received celebrity endorsements from the likes of Steph Curry, Larry David, and Tom Brady. He was known for his inclination towards philanthropy, which he has called his primary motivation for making money. These principles allowed him to brush shoulders with high-profile individuals who also believed in his vision of advancement in the cryptocurrency space.
FTX failed because of a run on customer’s accounts spurred by a drop in market prices. When these customers tried to take out their money, they found it simply wasn’t there. Instead, it was in Alameda Research, Bankman-Fried’s cryptocurrency trading firm. There, the money was used on speculative investments, executives’ expensive lifestyles, paying back debts, and donating millions to political campaigns. All of this was occurring in spite of promises from FTX that they didn’t move or utilize customer deposits whatsoever.
The collapse of the exchange has been representative of the cryptocurrency space at large. Many have likened the cryptocurrency industry to a wild west because of its minimal regulation and rapid expansion. Some have called for legislation governing the space, citing the high-profile FTX collapse as an excellent justification.
During direct examination at his trial, Bankman-Fried often struggled to find the right words, and he was even found lying on the stand at times. This, combined with the fact that the jury only convened for a few hours, has led experts to suggest that Bankman-Fried may receive a more severe sentence than normal (though whatever is decided, it will still be much lower than the 110-year maximum.)
Still looming, however, is the possibility that the government chooses to bring an entirely different case against Bankman-Fried with new charges. These five charges would be related to his violation of political campaign funding laws and bribery of foreign officials. This prospect means that he could end up with an even longer sentence than the already-hefty potential decades.
Sources: The Guardian, CNBC, CNN
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