King of cryptocurrencies is sentenced to 25 years in prison for fraud in the US

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Sam Bankman-Fried is the founder of FTX, a cryptocurrency brokerage that was worth around US$32 billion and was one of the largest in the world before going bankrupt in 2022. Sam Bankman-Fried leaving the forum in New York on Tuesday- fair (26) Mary Altaffer/AP Businessman Sam Bankman-Fried was sentenced to 25 years in prison for appropriating US$8 billion (R$40 billion) from clients of FTX — a cryptocurrency brokerage that was worth around US $32 billion and was one of the largest in the world before it went bankrupt late last year. The announcement took place this Thursday (28) at the federal court in Manhattan, New York. The conviction had already been decided in November — at the time, without defining the penalty. “He knew he was wrong,” Judge Lewis Kaplan said before announcing the sentence. “He knew he was a criminal (…) But he won’t admit anything, as is his right.” Bankman-Fried will appeal the conviction and sentence. Prosecutors had asked for between 40 and 50 years in prison for the businessman’s crimes. This was one of the biggest financial frauds ever recorded. The verdict came just over a year after FTX filed for bankruptcy protection, in a rapid corporate collapse that shocked financial markets and melted his personal fortune estimated at US$26 billion (R$130 billion). The sentence marked the fall of Bankman-Fried from “king of cryptocurrencies” and important political donor to the target of a mega-operation by American authorities in an investigation of fraud in the cryptocurrency markets. . READ ALSO From $32 billion to zero: what happened to the cryptocurrency giant FTX The former billionaire was extradited from the Bahamas in December 2022, when he was arrested and released shortly thereafter on bail. He was arrested again in August 2023, on charges of attempted witness tampering in the case. What happened to FTX? FTX’s problems began when the media began reporting that, to save Alameda Research, an investment fund also created by Bankman-Fried, the executive lent money from FTX itself to the company. The information is that he used client funds that were deposited with the brokerage to finance Alameda’s operation, which is illegal — since, although they are owned by the same owner, the companies’ business must occur separately. The news came to light at the beginning of November 2022, along with an Alameda balance sheet. The document revealed that around US$14.6 billion was held in FTT (the FTX token, a type of official currency on the platform). As a result, the broker’s clients began a rush to withdraw their deposits, afraid of losing their resources. Because it did not have enough dollars to cover all the withdrawals, FTX went bankrupt and filed a request for judicial recovery in the American courts on November 11, 2022. The company went bankrupt and caused Bankman-Fried to lose everything.

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