He now faces 115 years in prison
A few years ago Sam Bankman-Fried was in the Bahamas talking to the country's prime minister about paying off the entire national debt. Now, the founder of the once-powerful cryptocurrency exchange FTX who was considered the child prodigy of this emerging market, is facing consecutive sentences of up to 115 years in prison on seven felony charges.
Not only does his much-hyped trial begin today, but his biography is being published by Michael Lewis, the author of “The Big Short,” who reportedly met with Bankman-Fried at least 100 times over the course of two years. Depicting the rapid rise and fall of the “king” of cryptos, Lewis also presents his relationship with the Bahamas, where he first kept a luxurious villa and led a wild life, and then found himself in prison under deplorable detention conditions.
The beginning was in 2021, when FTX headquarters moved from Hong Kong to the Bahamas, partly because the Chinese government has started to “tighten the belts” on the cryptocurrency market. Bankman-Fried himself considered the country an attractive destination because it had implemented regulations that could legitimize the operation of the cryptocurrency market altogether.
But then, the country's economy, which is largely based on tourism, had “bent” under the weight of the pandemic, making the FTX transfer process difficult.
In order to more easily convince his roughly 40 employees to relocate to the Bahamas, but also to facilitate the transfer of his company, Bankman-Fried began to consider paying off the national debt out of his own pocket so that the country could more easily build roads and build schools. At the time, the debt was about 103% of GDP, or nearly $11.6 billion.
According to the biography, this idea was also discussed in a meeting with the country's prime minister, Philip Davis. In fact, the first person Davis wanted to meet after being elected prime minister in September 2021 was Bankman-Fried.
Due to the “explosion” in the cryptocurrency market, Bankman-Fried's fortune had swelled in 2021, as a result, at the age of just 29, he has taken a place on the Forbes list of the 400 richest people in the world. His fortune reached 22.5 billion dollars, as a result of which he invested – in the Bahamas alone – 256.3 million dollars in real estate and through FTX he loaned 28.4 million dollars to an aircraft company to finance the purchase of two private jets.
The biggest trial in cryptos
Today, Bankman-Fried faces seven counts: conspiracy to commit wire fraud on customers and banks, wire fraud on customers and banks, conspiracy to commit merchandise fraud, securities forgery and money laundering. The consecutive sentences for those charges total 115 years in prison. If convicted, concurrent sentences are more likely, but the fact that the total exceeds 100 years demonstrates the seriousness of the charges. Of course, it's worth noting that given the nature of the charges, a very large sentence is likely.
According to the indictment, Bankman-Fried bilked at least $1.8 billion from investors and concealed the extent. of the relationship between FTX and the trading company Alameda Research, which he had founded, as part of a multi-year scheme to defraud investors.
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