Shockwaves were sent through the world of crypto last night as Sam Bankman-Fried was handed a 25-year jail sentence for stealing billions of dollars from customers of the now-defunct FTX.
The sentence – one of the longest ever for white-collar crime – ends the dramatic downfall of the one-time crypto wunderkind who rubbed shoulders with everyone from Bill Clinton to Gisele Bundchen.
Bankman-Fried, 32, was found guilty on seven counts of fraud and money laundering after he conned £8billion from users of his crypto exchange FTX.
He spent it on his lavish lifestyle, property, risky investments and political donations.
And during his sentencing hearing yesterday, Judge Lewis Kaplan said the former crypto king had showed a ‘lack of any real remorse’ for his crimes.
Related Articles
HOW THIS IS MONEY CAN HELP
But experts have said his conviction sent a message to UK regulators.
Kumardev Chatterjee, an adviser at Interpol, said: ‘The sheer size of his sentence of 25 years – typically given to murderers in the UK – will be a sharp and much-needed wake-up call for the crypto industry.’
He added: ‘This will undoubtedly make regulators and other financial guard dogs more eager to ensure that the wild days of crypto are behind us in this new bull-run phase, to ensure a smoother and more predictable market.’
Walid Koudmani, a crypto analyst, said the conviction was likely to have a positive impact ‘inspiring confidence that there are repercussions for crimes and underhanded behaviour’.
Crypto is largely unregulated in the UK, with the Financial Conduct Authority repeatedly warning investors that they must be willing to lose all their money.
But yesterday’s legal decision also comes just weeks before the former boss of rival crypto exchange Binance is sentenced in US courts on a money laundering charge.
Changpeng Zhao pleaded guilty in November for failing to maintain an effective anti-money laundering programme at the world’s largest cryptocurrency exchange.
As part of that plea, Zhao – widely known as CZ – stepped down as chief executive and agreed to pay a £40million fine.
Guidelines suggest a maximum sentence of 18 months in prison.
Caroline Mauron, co-founder of digital asset firm Orbit Markets, said. ‘Individual accountability has come home to the crypto industry.
‘Expect founders and senior management at crypto firms everywhere to take a harsh look at their operations and further prioritise compliance.’
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.
