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FTX Founder Sam Bankman-Fried Appeals Convictions And 25-Year Sentence

By Nithya Bose in Business News, posted April 12, 2024

Sam Bankman-Fried, the ex-CEO of the now-defunct cryptocurrency exchange FTX, has filed an appeal against his fraud convictions and the 25-year prison sentence he received in late March.

He was convicted in November on seven charges, including fraud and conspiracy to launder money, and jailed last month.

The basis of his appeal remains unspecified, and the process could extend over several years.

FTX was valued at $32 billion at its peak.

But it collapsed in late 2022 amidst a broader cryptocurrency market crash.

The bankruptcy filings revealed the exchange had improperly used customer funds for high-risk investments through Alameda Research, a hedge fund closely linked to Bankman-Fried.

Bankman-Fried was found to have diverted customer money for personal luxuries such as political donations, luxury cars, expensive real estate in the Bahamas, and endorsements from high-profile celebrities.

This misuse led to a major financial shortfall when customers demanded the return of their assets.

Prosecutors called this straightforward embezzlement, which had been cloaked by innovative technology.

Bankman-Fried is accused of embezzling $8 billion from his customers.

The appeal process could take years

During his sentencing, Bankman-Fried expressed regret, stating, "I’m sorry about that. I’m sorry about what happened at every stage.

However, Judge Lewis Kaplan noted a lack of genuine remorse.

Prosecutors had initially sought a sentence between 40 to 50 years, while his defense argued for a mere six years.

Throughout his trial, Bankman-Fried maintained his innocence and even testified on his behalf—a move often considered risky.

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His testimony, however, failed to sway the jury.

The bankruptcy proceedings for FTX continue to be complex and fraught with challenges.

Bankman-Fried had said the company possessed sufficient assets to reimburse customers.

But the acting CEO of FTX has suggested such a scenario is highly unlikely.

He called Bankman-Fried's claims "delusional."

The appeal comes amid a wave of legal challenges facing crypto executives around the world.

These include the recent liability findings against Terraform Labs and its CEO Do Kwon, as well as impending sentencing for Changpeng Zhao, the former CEO of Binance, later this month.

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