FTX Clients Want Justice While Sam Bankman-Fried Waits for His Prison Sentence

Paresh Jadhav

11 months ago

As Sam Bankman-Fried, founder of FTX crypto exchange, continues his fall from grace, former customers are anxious for justice to be done and hope they can recover any losses sustained as part of his scheme.

They have already recovered cash, luxury property and cryptocurrency; hoping to recover even more of the billions lost when FTX collapsed last year.

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FTX customers are awaiting a surprise

Sam Bankman-Fried was found guilty on seven fraud and money laundering charges related to the collapse of FTX after a month-long trial, potentially facing as much as 110 years behind bars.

At trial, executives and customers testified against Bankman-Fried that he directed employees to spend customer deposits for non-business uses, misled investors about FTX’s solvency and its relationship to Alameda Research his private trading firm that he controlled while misleading investors about FTX.

Beginning in November 2022, when funds ran dry for FTX Exchange, withdrawals were suspended as withdrawals stopped being processed and then filed for bankruptcy protection. Bankman-Fried was arrested shortly thereafter in the Bahamas and extradited back to the US.

Danielle Sassoon, a prosecutor who clerked for Supreme Court Justice Antonin Scalia, employed Bankman-Fried’s own words against him during cross-examination in court by using them against him – using phrases such as he “didn’t follow the rules” against him and pushing him into admitting illegal actions such as lying to federal investigators. Bankman-Fried was ultimately released from incarceration after purchasing mackerel at $1.30/pack as barter items which helped keep his health while in prison – helping him remain healthy during his sentence.

They want to see justice served

Former FTX CEO Robert Longworth once worth $32 billion may spend his remaining days behind bars.

Prosecutors constructed their case against Bankman-Fried on testimony from his inner circle of executives who agreed to cooperate in exchange for reduced sentences. They described how the MIT graduate siphoned billions from FTX customers into his hedge fund Alameda Research before using them on public relations campaigns, stadium naming rights deals, political donations and congressional testimony – spending much of it himself.

He invested heavily in celebrity endorsements and living an extravagant lifestyle, employing Seinfeld co-creator Larry David, Tom Brady and Gisele Bundchen from football teams as spokespersons, with Bankman-Fried’s attorneys portraying him as an overcommitted “math nerd” who took on too much responsibility before becoming overwhelmed.

But a jury didn’t buy it: in less than five hours they found Bankman-Fried guilty on all counts and are sentencing him to 110 years in prison for his crimes. This has caused uproar among cryptocurrency investors who claim the government’s evidence was sufficient enough to convict Bankman-Fried and have expressed sympathy with his cause, such as Martin Shkreli (known for price gouging drugs himself).

They want to see FTX founder Sam Bankman-Fried punished

As the trial draws to a close, those left out by FTX’s collapse have eagerly anticipated hearing the verdict. Their goal is to see Sam Bankman-Fried held accountable for his role in its demise – they may well get their wish.

Damian Williams of US Attorney was charged with prosecuting former cryptocurrency entrepreneur who committed one of the largest frauds in American history. According to US Attorney Damian Williams, FTX exchange entrepreneur took billions from customers of FTX exchange and funneled them through his risky investment firm Alameda Research; their implosion caused investors to withdraw funds in panic.

If convicted, former FTX CEO Larry Thompson could face a long prison sentence. If found guilty on charges of wire fraud conspiracy, securities fraud and security fraud conspiracy as well as money laundering; in addition, millions in restitution must be paid back to Alameda and FTX creditors.

Experts who consulted CoinDesk estimated that Bankman-Fried will likely only serve several decades behind bars, taking into account customers who lost money as well as his personal circumstances and past criminal history.