They called him the “king of cryptocurrencies”. Sam Bankman Fried was sentenced to 25 years in prison for one of the largest financial frauds in US history which led to the collapse of Ftx, once one of the most popular cryptocurrency trading platforms. He is accused of having stolen 8 billion dollars from FTX customers.
The thirty-year-old, son of Joe Bankman and Barbara Fried, both professors at Stanford's law school, graduated from MIT in physics and mathematics, was known by his initials, SBF, which in Italian stand, ironically, for Salvo Buon End. The district judge American Lewis Kaplan made the ruling at a hearing in a Manhattan court after rejecting Bankman-Fried's claim that FTX clients had not actually lost money and after finding that he had lied during his testimony at the process.
The 12 counts
Last November one jury had found Bankman-Fried guilty of seven counts: from financial fraud to conspiracy to steal savers' assets to money laundering arising from the 2022 FTX collapse. Judge Kaplan said Bankman-Fried had shown no remorse. “He knew it was wrong,” Kaplan said. “He knew it was a crime. He regrets having done one bet very wrong about probability of being captured. But he won't admit anything, as is his right."
11 billion confiscated. Compensations are due
Judge Kaplan found that i Ftx customers lost 8 billion of dollars, the FTX stock investors lost $1,7 billion and that the hedge fund financiers Mall Research founded by Bankman-Fried have lost 1,3 billion dollars. The judge therefore imposed an $11 billion confiscation order and authorized the government to compensate the victims with the seized assets. Federal prosecutors had sought a sentence of 40 to 50 years. Mukasey had asked for a sentence of less than 5 XNUMX/XNUMX years.
The rapid rise and the very rapid decline
Founded in 2017 in Hong Kong, the company established its headquarters in Nassau in 2020 Bahamas. The scandal broke out in November of the 2022, thanks to a huge journalistic investigation by CoinDesk which revealed the financial fragility of Ftx and the possible scams carried out by its guru. The revelations prompted a crisis of confidence from customers who sought to withdraw their cryptocurrency investments. However, Ftx no longer had that money.
Il reason for the shortage, according to what emerged during the trial, it was that Bankman-Fried would have used them to finance his own luxurious life, full of shopping sprees, jewels, properties in the Bahamas, political financing to the Republican Party and the Democratic Party, but above all to support the activities of AlamedaResearch, an investment fund he owned that was in dire straits. The financial group, which rode a boom in the value of bitcoin and other digital assets, was worth 32 billion dollars in a couple of years and then plummeted to zero even more quickly.
The eye-catching weapon of charity
In history, including recent history and also in Italy, there have been many who have used theweapon of charity to win over customers, convincing them to also sign up for ethical purposes. The Sbf project says: maximize the value of the initiative, so you can convert it into donations for the purpose of beneficence e social cohesion. It was aimed in particular at talented young people encouraging them to focus on earning money and donating it to worthy causes.
Big investors and fears of a domino effect
But among investors and subscribers there was a large part of blue chip finance and the cream of overseas and Asian venture capital. Even in July 2021 SBF went so far as to declare that Ftx had the liquidity to buy Goldman Sachs. But in November of the same 2011 the company requested the Chapter 11 bankruptcy protection. There was precisely 8 billion dollars missing to reimburse the subscribers, who at that point had turned up en masse to collect.
The failure of Ftx has made veins and pulses tremble all over the world, fearing a Domino effect similar to that seen with the collapse of Lehaman Brother in 2008. Persinio Bank of Italy had shone a spotlight on the situation. An estimate formulated after examining the documents filed in court by the failed cryptocurrency exchange indicates that up to 1 million investors, including institutional and retail, could be involved. There could be 100 thousand Italians.
The waste of a very comfortable and very rich deposit
Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn since August 2023, after Judge Kaplan revoked his super bail following the discovery that Bankman-Fried had probably bribed witnesses at least twice. At Christmas 2022, New York federal judge Gabriel Gorenstein had in fact allowed Sam to go to his parents' house in California, despite having to wear an electronic bracelet, against the payment of a bail of 250 million dollars. But the luxurious stay in California lasted just over 6 months and due to the corruption of witnesses he had to return to prison.
