Comeuppance; justice; restitution. These are the words that can be aptly used to describe today's sentencing of Sam Bankman-Fried (SBF) for perpetrating the biggest financial scam in the US since Bernie Madoff's Ponzi scheme, ripping thousands of customers of the defunct crypto exchange FTX in the process.
For the benefit of those who might not be aware, Sam Bankman-Fried, the former CEO of FTX, was essentially running a Ponzi scheme to the benefit of his personal trading arm, Alameda Research. In essence, FTX repeatedly transferred its native FTT tokens to Alameda at dirt-cheap prices while, at the same time, the exchange inflated FTT’s value by utilizing a part of its revenues to burn a fraction of the token’s circulating supply. Alameda then used its FTT tokens as collateral to borrow client funds from FTX, which were then used to place leveraged bets. This gig ended once Alameda’s exposure to the FTT token became public knowledge, prompting Binance to start dumping its own FTT stash, collapsing the token’s price in the process. This resulted in a bank run as clients tried to exit the Ponzi scheme-promoting exchange, eventually resulting in FTX declaring bankruptcy in November 2022.
Figured I'd dust off some lesser known facts about SBF given today is his sentencing 🧵
1. In January '22, Sam market sold $75M of stETH, leading to a massive depeg event which set off the Celsius bankrun and the daisy chain of events that included the blow-up of 3AC pic.twitter.com/BGHem10yhz
— Conor (@jconorgrogan) March 28, 2024
The above thread details SBF's machinations in detail. After the collapse of FTX, Sam Bankman-Fried initially escaped to the Bahamas, from where he was extradited back to the US to face a number of charges related to wire and securities fraud.
Sam Bankman-Fried Sentenced to 25 Years in Prison
CORRECTED-FTX FOUNDER SAM BANKMAN-FRIED SENTENCED IN NEW YORK TO 25 YEARS (NOT 20) IN PRISON FOR MULTI-BILLION DOLLAR FRAUD
— *Walter Bloomberg (@DeItaone) March 28, 2024
This brings us to the crux of the matter. Sam Bankman-Fried is now heading to prison for 25 years. The judge has also ordered the former CEO of FTX to surrender over $11 billion. The cherry on top, however, is the following remarks by the presiding judge:
"When not lying, he was evasive, hair splitting, trying to get the prosecutors to rephrase questions for him. I've been doing this job for close for 30 years. I've never seen a performance like that."
Throughout the trial, Sam Bankman-Fried maintained that he did not do anything wrong intentionally, instead blaming "sophisticated analytics" and the incompetence of the junior staff for losing track of Alameda's FTT-based leverage.
https://twitter.com/TommyThornton/status/1773377249569395115
Do note that, courtesy of the current bullish wave permeating through the broader crypto sphere, all FTX creditors have been made whole by the defunct crypto exchange's estate, which was able to recover a lot of crypto assets that were initially deemed lost forever. This is one of the reasons why Sam Bankman-Fried has been awarded a much lower sentence than Bernie Madoff's 150 years in prison.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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