The founder of the notorious FTX crypto exchange, Sam Bankman-Fried, faces a 50-year prison sentence. Convicted in November of masterminding what prosecutors called one of the “largest financial frauds in American history,” Bankman-Fried could face a serious price for his ambitions.
FTX founder could spend up to 50 years in prison
The essence of the prosecution’s arguments comes down to the fraudulent actions of Sam Bankman-Fried, which led to the collapse of the FTX cryptocurrency exchange. A Manhattan federal court jury found him guilty on all charges, including defrauding investors, clients, and creditors.
Prosecutors painted a damning portrait of the failed entrepreneur, describing his recent life as marred by “unmatched greed and arrogance.” They claim his actions were risky and a deliberate ploy to gamble with billions of dollars that belonged to other people. Despite the seriousness of the charges, Bankman-Fried does not admit his guilt. This position only complicates the matter. “Even now, Bankman-Fried refuses to admit that what he did was wrong. His life in recent years has been one of unsurpassed greed and arrogance, ambition and rationalization, a desire for risk and gambling with other people’s money,” prosecutors wrote.
Defense Weakens Ahead of Verdict
Bankman-Fried’s defense, by contrast, argues for leniency, proposing a prison term of just over five to six years. They claim that most FTX clients will get their lost funds back and that the businessman did not set out to commit fraud. However, this defense does not stand up to scrutiny in light of the evidence presented during the trial. Among them are the testimony of several of Bankman-Fried’s closest associates, who later became state witnesses.
Implications for Crypto Regulation
The verdict, which will be handed down on March 28, will close this chapter in the life of the FTX founder and set a precedent for regulation and oversight of the cryptocurrency industry. U.S. Attorney Damian Williams emphasized the centuries-old nature of the corruption exposed in the case. “Sam Bankman-Fried committed one of the largest financial frauds in American history. The cryptocurrency industry may be new. Players like Sam Bankman-Fried may be new. But this type of corruption is as old as time itself,” he said.
FTX and The IRS
Now lawyers for the bankrupt exchange want to challenge everything the IRS is charging them with. According to them, everything that the service says has not been subject to any assessment and has no legal basis. “This Alice in Wonderland-style argument is not supported by any law,” they said. Some documents also noted that FTX, along with accounting firm EY, responded to more than 2,300 information requests from the IRS and provided everything it requested.
