Sam Bankman-Fried's 25-year jail sentence is a warning to crypto.
Sending one-time wunderkind Sam Bankman-Fried to jail for 25 years and stripping him of US$11 billion should act as powerful deterrent in a business still badly in need of cleaning up.
The sentencing of cryptocurrency wunderkind turned convicted fraudster Sam Bankman-Fried to 25 years in jail along with the forfeiture of more than US$11 billion looks like a fair outcome.
While not as harsh as the request from prosecutors for as much as 50 years, it should stand as a clear deterrent for aspiring fraudsters both in traditional finance and its decentralised offshoots. And given crypto is still in the midst of a much-needed clean-up, that matters.
To recap, the 32-year-old Bankman-Fried was convicted of fraud, conspiracy and several other offences last year after the spectacular collapse of his crypto exchange FTX revealed an US$8 billion hole of missing customer funds under his watch.
The jury wasn’t swayed by the one-time billionaire’s defence that he’d fallen victim to a market downturn, largely because the evidence was so overwhelming and his defense so contradictory. His former lieutenants’ testimony was as damning as his own lack of remorse and history of statements like: “bad words to regulators
LITTLE SYMPATHY
The hope of Bankman-Fried’s lawyers was that some mitigating factors might help tilt the balance in favour of a sentence of just six and a half years in jail (more like "pharma bro" Martin Shkreli than Ponzi scheme mastermind Bernie Madoff).
One was his relatively young age and character, portrayed as a “beautiful puzzle” - a smart, well-meaning outcast held back by mental health issues and whose real goal was not self-enrichment but philanthropy. Another was the optimism that the FTX bankruptcy process might repay customers in full, aided by a rebound in crypto prices and the firm’s stake in assets such as artificial intelligence start-up Anthropic.
