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Prosecutors are seeking decades in prison for Bankman-Fried

Prosecutors are seeking decades in prison for Bankman-Fried

US prosecutors have requested a prison sentence of 40 to 50 years for cryptocurrency entrepreneur Sam Bankman-Fried, who was convicted of fraud. In their request on Friday, they cited, among other things, investor losses of more than ten billion dollars.

Bankman Fried went on trial last year.Image: Cornerstone

The 32-year-old founder of cryptocurrency exchange FTX was found guilty by a jury in November. If Kaplan exhausts the proposed penalties on all charges, he could face more than 100 years in prison. Bankman-Fried's lawyers suggested six years in prison.

FTX, one of the largest venues for trading cryptocurrencies like Bitcoin, collapsed spectacularly at the end of 2022. Bankman-Fried was arrested in the Bahamas and extradited to the United States.

Misappropriated client funds

Although the cryptocurrency business can be complex, in the end the scam can be summed up in three words: Misappropriation of client assets. Bankman-Fried also had a hedge fund called Alameda Research that made risky trades and borrowed money from FTX. In fact, collateral should have been deposited for such transactions. There were also computer systems that were supposed to take care of this. But this program made a secret exception for Alameda. This allowed the hedge fund to go as deep as it wanted into FTX. But the Alameda trades fell through, and there was a $1 billion hole in FTX's coffers.

Bankman-Fried told the court that he had only a partial understanding of the financial situation of his companies. However, prosecutors accused him of “unprecedented greed” and stressed that given the “historical” dimension of the crime, the punishment should be appropriately severe. This should also “strengthen respect for the law.” Prosecutors also accused Bankman-Fried of repeatedly lying under oath. If the judge also reached this conclusion, the sentence could be higher. (SAW/SDA/DPA)

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