40 to 50 years imprisonment. This, according to the documents on Friday of the American justice system, Damian Williams, the federal prosecutor of Manhattan, is demanding against Sam Bankman-Fried, who is guilty of fraud worth eight billion dollars in November. More specifically, he was found guilty of using funds deposited by customers of his cryptocurrency exchange platform FTX, which went bankrupt in November 2022. The money fueled the risky deals and investments of his investment company, Alameda Research. Borrowings from FTX have reached approximately $14 billion. “SBF”, the falling star of cryptocurrency, thus faces a total of 110 years of criminal imprisonment. Federal Judge Louis Kaplan will hand down his sentence on March 28.
Prosecutors are seeking a 6-year sentence
Sam Bankman-Fried’s lawyers, a few days ago, requested that the sentence be reduced to six years in prison. But for prosecutor Williams, the young financier “ The biggest financial fraud in American history “
The second trial was originally scheduled to begin last Monday and covered five other charges, including conspiracy to bribe a foreign agent and donate to politicians. They were excluded from the first trial because they did not appear in an agreement reached with Bahamian authorities to proceed with Sam Bankman-Fried’s extradition in December 2022.
But Damien Williams dropped another trial in late December. The prosecutor then indicated that the Bahamas had still not given the green light and that American authorities ” Fast resolution » From the “SBF” folder. Sam Bankman-Fried was accused of authorizing the payment of approximately $150 million in bribes to Chinese officials to open FTX’s assets in China. He was also accused of using money from FTX clients to donate to political candidates, particularly Joe Biden.
A little genius with a whimsical look
Gone are the days when “SBF”, a billionaire before the age of 30, a bit of a genius with eccentric looks, conquered the cryptocurrency world in a matter of months. At the cost of insane risks, he goes straight to jail. As a reminder, in just a few months, this physics graduate from the prestigious Massachusetts Institute of Technology turned a small startup launched in 2019 into the second largest cryptocurrency exchange platform in the world. Destined to take on the role of crypto ambassador, he quickly rises from his status as a young boss to the media and to Congress, where he makes his first appearance during a sector hearing in December 2021. An unusual character with abundant curly hair and a round face, the public discovers that he wears a T-shirt and Bermuda shorts when not in costume on the Congress floor.
Imprisoned American elected officials
“SBF” appeals to American elected officials with its clear language and vision of the future of cryptocurrency, including a comprehensive regulatory framework, while many in the industry oppose it. He is multiplying new projects, some of which directly encroach on the flowerbed of the American stock exchange.
The majority shareholder of his group, the California native has an estimated fortune of over $26 billion. In October 2021, Forbes magazine headlined, “Only Zuck (Mark Zuckerberg) became so rich and young.
The son of two Stanford scholars also ventures outside the crypto universe, donating to American political candidates and persuading celebrities like American football legend Tom Brady to extol the merits of FTX in exchange for hefty remuneration. According to the CNBC channel, “SBF” signed Taylor Swift to a contract before eventually leaving the partnership.
These vegans advocate the concept of effective philanthropy, which typically involves donating all or part of one’s fortune to charitable organizations. When the storm on cryptocurrency rises, in the spring of 2022, it acts as a stabilizing element, buying the assets of the troubled platform BlockFi or another bankrupt player, Voyager.
“We take seriously our duty to protect the digital asset ecosystem and its customers,” tweeted Sam Bankman-Fried, who some were already comparing to the Pope of American capitalism, Warren Buffett, even though he was only 30 years old.
Enormous risks
But behind this reassuring facade, the troublemaker engages in financial balancing acts and takes enormous risks, court documents would later reveal. His team used money deposited by customers on the FTX platform, without their consent, to buy its Alameda subsidiary’s bold bets, real estate, or donate to politicians.
“He wanted to be President of the United States”
” Talented boss “,” Ambitious “, that” Wanted to be President of the United States », at his trial, described Deputy Prosecutor Daniel Sassoon, who led the prosecution.
In his race, ” He wanted to spend billions from his customers’ accounts to get power and connections “, she emphasized. ” He had the arrogance to think he could cheat and get away with it. »
At the beginning of November 2022, Media SynDesk states that a significant part of Alameda’s wealth consists of FTX, a cryptocurrency created by FTT, which caused the collapse of this digital currency and with it the empire of “SBF”. In court, he tried to present the face of a young entrepreneur lacking experience, who ” Big mistakes » But acted in good faith.
Another Fallen Crypto Stars
Changpeng Zhao
Born in China in 1977, Changpeng Zhao moved to Canada with his family in the 1980s and earned a degree in computer science from McGill University in Montreal, according to his profile in the Bloomberg Billionaires Register. He founded Binance in Shanghai (China) in 2017. The company experienced record growth and became the world’s largest cryptocurrency exchange. A celebrity known for his outspokenness in the crypto world with 8.7 million subscribers worth $65 billion in 2022, according to Forbes. But the success comes amid increased scrutiny of Binance’s operations by authorities, as cryptocurrency companies around the world begin to face a wave of criminal investigations.
The United States accuses him and Binance of multiple violations of money laundering, including knowingly authorizing transactions with groups considered terrorist, such as the Islamic State, and countries under US sanctions, such as North Korea and Iran.
The case ended last November with a settlement: Binance agreed to pay a $4.4 billion fine and Changpeng Zhao resigned as CEO. And although he apparently retains his shares in the company, he is prohibited from participating in its activities. He also faces jail time.
Do Kwon
South Korean Kwon Do-kyung, known as Do Kwon, co-founded Terraform Labs in 2018, developing the TerraUSD and Luna cryptocurrencies. The Stanford graduate, who has worked at Apple and Microsoft, is quickly becoming a success, attracting billions in investment and fueling global media hype. South Korean media called him a “genius”. But in May 2022, the value of this cryptocurrency – which according to Do Kwon is believed to be more stable than others – collapsed, wiping out nearly $40 billion in investments and creating a shock wave in the sector. In total, the decline of the two currencies may have resulted in an additional loss of over $500 billion in global cryptocurrency markets.
According to experts, Du Quan actually set up a Ponzi scheme, a fraudulent financial arrangement that consisted mainly of reimbursing clients’ investments with funds provided by new entrants.
Du Kwon left South Korea before the fall and went on the run for several months. He was eventually arrested in Montenegro while trying to board a flight using a false passport. The US and South Korea are seeking his extradition.