Bankman-Fried is sentenced today. What is the effect of the fall of the crypto “monk”? – Money

The fall of Sam Bankman-Fried’s empire threw investments in cryptoactives off the cliff at the end of 2022. Interestingly, the reading of his sentence coincides with one of the moments of greatest vitality for cryptocurrencies. The former executive director of FTX hears his sentence this Thursday, March 28th. From “capitalist monk” to “supervillain”, Bankman-Fried’s rise and fall indelibly mark the world of cryptocurrency investments.

In court, the US Attorney’s Office asked that the 32-year-old former banker serve a sentence of between 40 and 50 years in prison. Prosecutors say that the former cryptocurrency rock star is actually a man with “incomparable selfishness and arrogance”, who allegedly violated the law out of “megalomania and considering himself to be on a higher plane than the rest”. Therefore, prosecutors are calling on the judge to sentence the co-founder of what became one of the largest cryptocurrency platforms in the world – valued at 32 billion dollars – to a sentence of between 40 and 50 years in prison. In turn, Bankman-Fried’s defense asks for only six years in prison, stating that the United States Department of Justice’s request was “disturbing” and whose sole objective would be to “crush” their client.

But the judge may even decide to impose the maximum penalty provided for the crimes for which the banker was convicted, which could imply a sentence of more than 100 years in prison. Faced with this hypothesis, the defense of the former CEO of FTX simply responded that it was “grotesque”.

Pedro Silva, investor in cryptocurrencies, explains that Bankman-Fried’s effective prison sentence is not causing a reaction in the markets, but assumes that the community most attentive to this market “wants to see justice done for someone who harmed the lives of thousands of people and dozens of companies who believed that FTX was a safe exchange.” And he says that what could actually affect the markets is “people recovering what they lost in FTX, this could send a positive signal to the markets and investors feel that they are protected, because in addition to FTX having gone into insolvency, there was also a failure [por parte] regulators, so it was important to show that there is some protection”, he argues.

Last November, a New York jury found Sam Bankman-Fried (SBF) guilty of seven crimes, including conspiracy and fraud worth more than eight billion dollars. The jurors thus endorsed the Department of Justice’s accusation that Bankman-Fried transferred money from FTX clients to the company’s research and investment arm – Alameda – to carry out risky investments, pay political donations and still buy expensive properties for several company staff and for the family itself. Along the way were crimes of violation of US party financing law.

The jury’s decision was mainly based on the live testimony of two people close to Bankman-Fried and who were part of the leadership of the FTX group: Caroline Ellison, who led Alameda Research and who was Bankman-Fried’s girlfriend, and Gary Wang, who was responsible for technology at FTX.

Throughout the entire process, Bankman-Fried pleaded not guilty and stated that there were simple solutions to the problems generated by the alleged crimes committed and the people he harmed. “Mr. Bankman–Fried continues to live in his world of illusion. The business he left on November 11, 2022 was neither solvent nor safe”, assured John Ray, chosen to lead FTX’s bankruptcy process.

According to the indictment, SBF and his closest circle lived in a gigantic penthouse overlooking a marina in the Bahamas. The property was valued at more than $35 million.

Pedro Silva refuses to accredit Bankman-Fried as a “crypto guru” and prefers to compare him to Bernie Madoff or Jordan Bellfort. “They are people who stand out but then we realize that what they represented was actually a void.” “On the other hand, we have the previous CEO of Binance known as CZ who never harmed any investor, he just had regulatory issues at Binance that are related to the fall of FTX, or Michael Saylor CEO of Microstrategy who we can equate to a Warren Buffet. None are gurus, but they are references within the markets.”

In the investor’s opinion, FTX’s place has not yet been taken since its fall, because it had a very easy-to-use user interface that people valued. But the current state of the cryptocurrency market shows that investor confidence is returning and with greater strength than ever.

The fall of Sam Bankman-Fried’s empire threw investments in cryptoactives off the cliff at the end of 2022. Interestingly, the reading of his sentence coincides with one of the moments of greatest vitality for cryptocurrencies. The former executive director of FTX hears his sentence this Thursday, March 28th. From “capitalist monk” to “supervillain”, Bankman-Fried’s rise and fall indelibly mark the world of cryptocurrency investments.

In court, the US Attorney’s Office asked that the 32-year-old former banker serve a sentence of between 40 and 50 years in prison. Prosecutors say that the former cryptocurrency rock star is actually a man with “incomparable selfishness and arrogance”, who violated the law out of “megalomania and considering himself to be on a higher plane than the rest”. Therefore, prosecutors are calling on the judge to sentence the co-founder of what became one of the largest cryptocurrency platforms in the world – valued at 32 billion dollars – to a sentence of between 40 and 50 years in prison. In turn, Bankman-Fried’s defense asks for only six years in prison, stating that the United States Department of Justice’s request was “disturbing” and whose sole objective would be to “crush” their client.

But the judge may even decide to impose the maximum penalty provided for the crimes for which the banker was convicted, which could imply a sentence of more than 100 years in prison. Faced with this hypothesis, the defense of the former CEO of FTX simply responded that it was “grotesque”.