ALBAWABA - The founder of the cryptocurrency exchange platform and coin FTX, Sam Bankman-Fried, 32, has been found guilty on Thursday and given a 25-year jail term for defrauding investors out of nearly $8 billion, according to New York Times, ending one of the biggest rise and fall stories in crypto.
The Bahamas-based FTX peaked at an evaluation of $32 billion earlier in 2022 according to CNBC, becoming one of the largest crypto currency marketplaces in the globe, offering providing spot trading in alongside derivatives products, before seeing a downfall that lead to the incarceration of its founder Sam Bankman-Fried.
Numerous FTX victims wrote to Judge Lewis Kaplan pleading for a severe punishment, citing among the fact that everything they owned was perished as a result of the cryptocurrency exchange's collapse, as reported by Yahoo Finance.
In late 2022, FTX and its affiliate Alameda Research went bankrupt when users rushed to withdraw their investments after a report by CoinDesk revealed their connection and that Alameda was mostly valued by speculative cryptocurrency coins, according to Investopedia, causing a crash in the once evaluated at $1 trillion crypto market.
Due to the embezzlement of over $8 billion in client deposits, the establishment of an insolvency, and the creation of false financial statements inflated with holdings of low-value tokens to conceal the lack of funds, Investopedia adds that the U.S. government was compelled to file both criminal and civil charges against Sam Bankman-Fried and other top FTX executives.
Person holding cellphone with website of cryptocurrency exchange company FTX Trading on screen in front of logo, illustrative image of FTX token collapse (Shutterstock)
Jude Kaplan commenting that Bankman-Fried “knew it was wrong [and] criminal” adding that “He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right," as reported by Reuters.
During courtroom hearing in Manhattan, Judge Kaplan ordered the 25 year-long prison term, dismissing Bankman-Fried's argument that FTX investors did not really lose funds and concluding that he had lied throughout his trial records.
A jury returned a guilty verdict on seven charges of fraudulent activity and conspiracy relating to the 2022 collapse of FTX, which the prosecution described as one of the largest financial scams in American history.
