Sam Bankman-Fritothe disgraced cryptocurrency executive, He will receive his prison sentence on Thursday. If the prosecutors get what they want, the former CEO of failed cryptocurrency exchange FTX He could serve between 40 and 50 years in prison.
This is what you should know.
Who is Sam Bankman Fried?
Sam Bankman-Fritoalso known as โSBF,โ he launched the FTX cryptocurrency exchange in 2019 and went bankrupt in 2022. Born in 1992 in California, he grew up in an academic family, and his parents were professors at Stanford Law School.
He earned a bachelor's degree in physics with a minor in mathematics from MIT in 2014. While in the program, he worked as an intern in 2013 for the trading firm Jane Street Capital in New York. It was there that she met Caroline Ellison, who later became her girlfriend. Ellison would become the CEO of Alameda Research, a quantitative cryptocurrency trading firm and SBF's first company, founded in 2017. It was later discovered that she created FTX to support Alameda's trading business.
What was FTX?
Bankman-Fried co-founded the FTX crypto exchange in 2019 with American computer programmer Gary Wang. When the Covid-19 pandemic subsequently boosted cryptocurrency trading around the world, FTX rode the wave. In 2020, FTX bought Blockfolio, the market-leading news and portfolio tracking mobile app, for $150 million. SBF appeared as a speaker at several crypto and blockchain conferences, attracting a large following.
How did it collapse and what happened next?
In November 2022, cryptocurrency news website CoinDesk reported on FTX's poor balance sheet and liquidity crisis. Big names like Cryptocurrency exchange Binance chose not to provide any support to FTX or Bankman-Fried.
The cryptocurrency exchange collapsed overnight, resulting in a loss of $10 billion in customer funds. This had a domino effect on other crypto companies, throwing them into financial turmoil.
Several companies with direct or indirect connections to FTX, including BlockFi, Voyager, Celsius, Genesis, and Gemini, went bankrupt within weeks. The cryptocurrency market saw its darkest period to date, resulting in a loss of more than $1 trillion, and the price of Bitcoin fell below $18,000.
Why was Sam Bankman-Fried convicted?
Sam Bankman-Fried, once a crypto icon, became a scammer. Federal prosecutors presented both criminal and civil charges against Sam Bankman-Fried and other top FTX executives in late 2022. They were accused of misappropriating $10 billion in customer deposits and generating false financial statements.
He court appearances of FTX's top executives attracted widespread attention, as did their romantic lives.
In November 2023, a federal jury in New York Bankman-Fried convicted of fraud for stealing at least 10 billion dollars from clients and investors.
What sentences are prosecutors and defense attorneys seeking?
When he returns to court today, Bankman-Fried will be sentenced. Prosecutors are asking for 40 to 50 years in prison, while Bankman-Fried's lawyers are asking for only 5 to 6 years in prison. His attorneys have cited medical conditions including neurodiversity and autism, making him "exceptionally vulnerable in a prison population," as well as Bankman-Fried's desire to make "the world a better place" and his remorse over the collapse. of cryptocurrency exchange.
