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We begin this breaking news this hour with breaking news out of New York. Former crypto mogul Sam Bankman-Freed has been sentenced to 25 years in prison.
He was convicted of fraud and money laundering last year after stealing billions from cryptocurrency customers. The CBC’s Richard Madden is following the story for us. Richard, what’s unfolded so far and what can we expect?
Well, he’s been sentenced, and it was significant. Prosecutors were pushing for 50 years behind bars, and this sentence is half of that, 25 years. It’s still far more than the 6 years Bankman-Freed’s lawyers were hoping for. So, a 25-year sentence means, barring an early parole, Sam Bankman-Freed will be out of prison at the age of 57.
This sentence follows after the jury found him guilty of one of the largest white-collar crimes in history, which ranges from wire fraud to money laundering, in an elaborate scheme to deliberately steal up to four billion in consumer deposits through his cryptocurrency exchange company, FTX.
You’ll recall Freed and his three top executives publicly assured investors their deposits would be safely secured in their exchange system, but instead, they used that cash to pay for their lavish expenses, high-end properties, even political donations.
Those executives later pleaded guilty to fraud charges and cut plea deals with the feds and testified against Bankman-Freed in court. During his trial, Bankman-Freed insisted it wasn’t fraud but simply poor business decisions and management screw-ups that caused the unraveling of his crypto exchange business.
The company realized they were out of cash in October 2022, and FTX filed bankruptcy a month later, which triggered the biggest collapse of the crypto market in history. Typically in white-collar crimes, the larger the financial loss, the longer the sentence.
Bankman-Freed got a bit of a lighter one, considering Bernie Madoff, who was convicted of fraud for roughly the same amount, got 150 years. Beyond this sentence, investors of FTX may feel some optimism because the value of their cryptocurrency holdings has actually shot up since FTX collapsed.
So, in theory, tens of thousands of investors could make their money back. As for the other executives at FTX, a judge will sentence them next at some point down the road, but for now, it’s unclear when.
Richard, this isn’t the end of Bankman-Freed’s legal troubles. What more can you tell us about that?
Yeah, there’s another chapter in the stunning rise and fall of Sam Bankman-Freed that will soon begin because he faces two more criminal trials on separate charges. One alleges he committed bank fraud; another accuses him of bribing Chinese officials.
That trial is set for March. But today, 25 years for Sam Bankman-Freed. That is a dramatic rise and fall for him. Thanks for keeping an eye on the story for us. The CBC’s Richard Madden reporting from Washington. Thank you.
