Former cryptocurrency tycoon SBF sentenced to 25 years, fined over $11 billion in assets forfeited
Former cryptocurrency tycoon and founder of the cryptocurrency exchange FTX, SBF, has been sentenced to 25 years in prison for seven charges including fraud and money laundering, with over $11 billion in assets confiscated. The verdict, which is lower than what the prosecutors requested but higher than what the defense suggested, has sparked controversy. SBF denies the crimes and claims to be a victim of the market downturn, but the court believes he has not shown remorse and the crimes are serious. The verdict sends a significant message, similar to the sentence of the former CEO of Enron. SBF's lawyer has stated they are considering an appeal. The judgment has important implications for the cryptocurrency industry
According to the Zhitong Finance and Economics APP, on March 28, Judge Lewis A. Kaplan in the Manhattan Federal Court finally sentenced Sam Bankman-Fried (SBF), the former cryptocurrency tycoon and founder of the cryptocurrency exchange FTX, to 25 years in prison for seven charges including fraud and money laundering, and confiscated over $11 billion in assets. The 25-year sentence is far lower than the 40 to 50 years requested by federal prosecutors, but much higher than the 5 to 6.5 years recommended by SBF's lawyers.
Prior to the sentencing, SBF denied intentionally committing fraud, claiming that he and FTX were victims of the 2022 market downturn, and expressed "regret" for his actions at various stages. However, Judge Lewis A. Kaplan rejected SBF's 20-minute statement, believing that he did not truly repent and that his crimes were serious. The judge emphasized, "Although SBF has been convicted and faces imprisonment, there is a risk of him harming society again in the future. This risk is not insignificant, but rather something the court should seriously consider." The judge also dismissed SBF's claim that FTX customers did not actually suffer losses and accused him of lying during the trial.
SBF's lawyer stated that SBF is just a "math nerd," and while they respect the jury's decision, they will consider an appeal. The lawyer also said in a statement, "We are very disappointed with the outcome." "SBF maintains his innocence and will continue to actively defend against the charges."
Although federal prosecutors compared SBF to Bernie Madoff, who was sentenced to 150 years for a massive Ponzi scheme, SBF's sentence is closer to the 24-year sentence of former Enron CEO Jeffrey Skilling for accounting fraud. Former federal prosecutor and current lawyer at Reed Smith, Mark Bini, said, "While the sentence is lower than the 40 to 50 years requested by the prosecutors, this is a very significant judgment. It sends a message that those convicted in the cryptocurrency field will face serious consequences."
In November 2022, CoinDesk, a media outlet focusing on cryptocurrencies, revealed the flawed balance sheet of Alameda Research, a hedge fund under SBF, causing industry-wide panic and concern about FTX and its liquidity. Prior to this, due to the downturn in the cryptocurrency market and FTX's opaque financial structure, many clients were already feeling uneasy about their investments. It is reported that FTX had no credible financial documents or accounting firms responsible for financial audits. In the same month, FTX declared bankruptcy, resulting in losses of tens of billions of dollars for its clients.
The indictment from the U.S. Department of Justice shows that Alameda Research had been embezzling FTX deposits in various ways, turning FTX clients into a "cash machine" for Alameda Research. SBF himself withdrew funds from Alameda Research for personal luxury, venture capital, corporate sponsorships, political donations, etc