FTX trial: Sam Bankman-Fried, “the fallen king of cryptos”, set for his prison sentence this Thursday

Judge Lewis Kaplan's verdict will fall this Thursday. Convicted of fraud in November, Sam Bankman-Fried, “the fallen king of cryptos”, co-founder of the FTX exchange platform whose bankruptcy permanently shook the entire world of cryptocurrencies, must receive his sentence this Thursday. Last November, an American jury unanimously found him guilty of the seven charges brought against him, including “fraud”, “money laundering” and “conspiracy”. Guilty of orchestrating one of the largest financial frauds in American history, leaving behind an $8 billion debt and thousands of destitute investors. Also guilty of using, without their knowledge, funds deposited by FTX clients to cover risky transactions and investments of his investment company, Alameda Research.

The five weeks of trial saw the accumulation of damning testimonies from his former associates, including that of the former general director of Alamada Research, Carolyn Ellison, as well as thousands of documents shedding light on the setup put in place under the impetus of the all-powerful Sam Bankman-Fried. On one side, an FTX exchange platform, which promoted the security of clients' assets through major marketing campaigns on social networks and television, raking in billions of dollars in funds. On the other, an investment company, Alameda Research, which used FTX clients' money to take risky positions, buy real estate, lend money to its executives or make donations to politicians . Faced with this, Sam Bankman-Fried has always proclaimed his innocence, only conceding a few “errors”. His hearing at the trial left him feeling uneasy.

American prosecutors are hoping for a sentence of between 40 and 50 years in prison. A sentence which would be much lower than that of Bernard Madoff, with whom his name is often associated in the world of financial crooks. The latter was sentenced in 2009 to 150 years in prison for pyramid fraud which caused 4,800 clients to lose nearly $65 billion. He died there.

Also read: FTX trial: Sam Bankman-Fried joins Bernard Madoff in the pantheon of crooks

Since August 11, 2023, Sam Bankman-Fried has been imprisoned at the Metropolitan Detention Center in Brooklyn, where he is expected to serve the remainder of his long sentence. For several months, he has shared his “VIP” cell with the former president of Honduras Juan Orlando Hernandez and the former head of public security in Mexico, indicted for drug trafficking. “SBF” has no internet access.

“I think he is very convinced that he had no criminal intent. He is not innocent but he feels innocent,” his biographer Michael Lewis, author of Going Infinite (Paperback editions) recently explained in an interview with Les Échos. “Mr Bankman-Fried continues to live in the illusion by claiming that the possibility for customers of the now bankrupt cryptocurrency exchange FTX to recover their funds means that he did not steal them,” declared last week John Ray, the CEO responsible for recovering the maximum funds from the FTX platform.

Sam Bankman-Fried does not risk cumulation with other sentences since there will ultimately not be a second trial, as was once in question. Last December, the New York federal prosecutor dropped charges for illegal political financing and corruption.