South Asia and Beyond

Crypto King Sam Bankman-Fried: A Convict At 32

Sam Bankman-Fried, once known as the crypto king, has been sentenced to 25 years in jail. For someone who’s just 32 years old, the punishment may sound too much. But Sam can consider himself lucky. The maximum punishment for the crimes he has been convicted of could have meant over 100 years in jail. Prosecutors had sought half of that time. The former billionaire been found guilty of wire fraud conspiracy, wire fraud, conspiracy to commit money laundering, conspiracy to commit commodities fraud and conspiracy to commit securities fraud.

Sam was born and brought up in Silicon Valley. His parents were respected law professors at Stanford. A talented student, he studied Physics and Maths at the Massachusetts Institute of Technology.

He learnt trading in stocks while he was with Jane Street, an elite trading firm on Wall Street. The job didn’t last long as he got bored and moved on.

Sam bought Bitcoin from places he got it cheap and then sold it where it was trading higher. In his testimony in court, he admitted he knew little about cryptocurrency.

He started making profits, and soon along with friends started a new trading venture in 2017, which was named Alameda Research. Two years down the line, Sam co-founded a crypto exchange called FTX. He wasn’t too sure it would click and even thought of selling it off. In his court testimony last year, he said, “I thought there was maybe a 20% chance of success. Even that 20% chance was a huge opportunity, given that the biggest exchanges at the time were multibillion-dollar companies.”

Nitin A Gokhale WhatsApp Channel

FTX was a hit, drawing a lot of customers. But the tide turned as the so called digital winter arrived in 2022. With a decline in the cryptocurrency market, Alameda Research incurred heavy losses. Prosecutors said Sam directed that deposits be moved from FTX customer accounts to Alameda.

By the end of 2022, FTX was bankrupt.

Prosecutors alleged that Sam used the money to buy real estate. He tried to influence cryptocurrency regulation by making campaign contributions to US politicians.

Sam’s lawyers sought a sentence of five to six years. The judge had other ideas.

Subrat Nanda

At six feet and over, cool, calm and always collected. Never a hair out of place. He is the high priest of editorial facts, grammar is his baby and headlines are meat on the bone. Loves samosas and cricket, tracks Twitter and when in his cups, nothing better than Jagjit Singh’s ghazals.