In a stunning turn of events, Sam Bankman-Fried, once hailed as the King of Crypto, is now facing the prospect of decades in jail after being found guilty of fraud and money laundering.
The 31-year-old entrepreneur, who ran one of the world’s largest cryptocurrency exchanges, has seen his empire crumble, with his sentencing scheduled for March 28.
Guilty Verdict and Potential Maximum Sentence
Bankman-Fried was found guilty last month on seven counts related to fraud and money laundering, including charges of lying to investors, stealing billions from his firm FTX, and contributing to its eventual collapse. Five of these charges carry a maximum prison term of 20 years, while two others have a five-year maximum.
The cumulative potential maximum sentence is a staggering 110 years, although it is unlikely the judge will impose the full extent.
Charges and Allegations
The charges against Bankman-Fried included campaign finance violations, conspiracy to commit bribery, and conspiracy to operate an unlicensed money transmitting business. Prosecutors argued that a second trial was not in the public interest, given the severity of the charges and the strong case against him.
His arrest came after FTX, once valued at $32 billion, declared bankruptcy in November last year, with $8 billion in customer funds missing.
Collapse of FTX and Legal Battles
FTX, launched in 2019 by Bankman-Fried and his MIT classmate Gary Wang, acted as an unregulated bank, allowing users to trade money for cryptocurrencies. At its peak, FTX facilitated $10 billion-$15 billion in daily trading.
The downfall began with a Coindesk investigation, revealing risky financial practices and the alleged misuse of customer funds. Panicked customers withdrew billions, leading to FTX’s bankruptcy in November 2022.
Sam Bankman-Fried Network and Charitable Endeavors
Once a charismatic figure with A-list endorsements, including Larry David, Gisele Bündchen, and Tom Brady, Bankman-Fried rubbed shoulders with influential personalities like Tony Blair and Bill Clinton.
He donated millions to charitable causes and expressed the desire to give away most of his fortune.
Born to prominent academics and educated at MIT, he joined trading firm Jane Street before venturing into cryptocurrency.
Sam Bankman-Fried Personal Background and Early Success
Bankman-Fried’s early success was marked by a talent for mathematics and a commitment to effective altruism, aligning with his parents’ advocacy for social equity.
However, the rise of his empire, built on what the jury deemed lies, now faces a reckoning with the law. As the sentencing date approaches, the crypto world watches the fall of the once-revered King of Crypto.
Inputs from BBC News