By Elena Salvoni and Paul Farrell For Dailymail.Com
11:24 01 Apr 2024, updated 13:02 01 Apr 2024
- The ex crypto boss has insisted that he is ‘of course’ remorseful for his actions
Disgraced former crypto billionaire Sam Bankman-Fried said that he didn’t think what he was doing was illegal in his first interview in the aftermath of his sentencing for fraud last week.
‘I never thought that what I was doing was illegal. But I tried to hold myself to a high standard, and I certainly didn’t meet that standard,’ Bankman-Fried, 32, told ABC News from his jail cell in Brooklyn.
Bankman-Fried was sentenced Thursday to 25 years in prison for a massive fraud on hundreds of thousands of customers that unraveled with the collapse of FTX, once one of the world’s most popular platforms for exchanging digital currency.
As he was sentenced Thursday after being convicted of seven counts of fraud, conspiracy and money laundering, the judge said that the defendant’s remarks never conveyed ‘a word of remorse for the commission of terrible crimes.’
But the former poster boy of cryptocurrency has now insisted that he is ‘of course’ remorseful for his actions, saying via email that what happened still ‘haunts’ him and that ‘it’s most of what I think about each day.’
Bankman-Fried spoke over the weekend from his cell in the Metropolitan Detention Center in Brooklyn.
During his correspondence with ABC, he admitted that FTX’s insolvency was the result of several ‘bad decisions’ he made in 2022.
‘I’m haunted, every day, by what was lost. I never intended to hurt anyone or take anyone’s money. But I was the CEO of FTX, I was responsible for what happened to the company, and when you’re responsible it doesn’t matter why it goes bad.
‘I’d give anything to be able to help repair even part of the damage. I’m doing what I can from prison, but it’s deeply frustrating not to be able to do more,’ he said.
More than 1 million customers face potential losses as a result of FTX’s sudden November 2022 collapse.
Victims say they are still owed more than $19 billion based on current crypto prices – though Bankman-Fried insisted during his sentencing that victims can get their money.
He claimed in court that customers could have been paid back ‘long ago’ had he or another former colleague remained in post and the FTX exchange been restarted.
The judge flatly denied his assessment, saying: ‘The defendant’s assertion that FTX customers and creditors will be paid in full is misleading. It is logically flawed, it is speculative.’
Judge Kaplan said it made no difference that cryptocurrencies had gone up in value since FTX went bankrupt in November 2022.
This, in part, makes it likelier that FTX victims could be repaid in full through the bankruptcy process.
Judge Lewis Kaplan recommended a medium-security jail for Bankman-Fried’s sentence and ordered him to pay $11billion for stealing $8 billion from customers in an elaborate scheme.
The loss to FTX investors was $1.7billion, the judge found, while the loss sustained by lenders to Alameda Research, FTX’s sister company that Bankman-Fried also owned, was $1.3billion.
The theft from FTX customers was a staggering $8billion, the judge ruled.
‘The crimes here included taking FTX customer money to which the defendant had no right and using it for his own purpose,’ Kaplan said.
‘The fact that a combination of successes in some of those investments, persistence by the current leadership of the FTX bankruptcy estate in clawing back stolen assets and fortuitous but radical run up in the value of some cryptocurrencies might result in benefit to some creditors, it bears no logical reactions to the gravity of the crime that were committed.
‘A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his winnings to pay back what he stole if he gets caught,’ the judge said.
The judge made three findings of perjury in addition and said Bankman-Fried willfully and materially committed it.
Bankman-Fried has vowed to appeal his sentence, and said his defense team will do so later this year based on certain testimony in his trial that he said, ‘greatly misstated what actually happened’.
He pleaded for a more lenient sentence at New York City federal court on Thursday.
‘A lot of people feel really let down and they were very let down. I’m sorry about that. I’m sorry about what happened at every stage,’ Bankman-Fried he said. ‘Things I should have done, things I shouldn’t have.’
In under a decade, Bankman-Fried went from being an unknown college grad to crypto star to disgraced felon.
In 2014, Bankman-Fried graduated from MIT with a physics degree. While there, he took an internship at Jane Street Capital, a proprietary trading firm. He would return there full-time after leaving school. This was where he got his start as a trader, and also, where he met Ellison.
Bankman-Fried was older than Ellison by about two years, and he would later ask her to join his new venture. Alameda Research. It was a crypto trading firm, sometimes called a hedge fund.
When he later testified in his own defense, Bankman-Fried was asked what he knew about crypto, to which he said ‘basically nothing.’
‘I knew a bitcoin was digital, you could trade it on website. I knew there were other crypto currencies, I had absolutely no idea how they worked.’
But Bankman-Fried looked at the opportunities to make money and went ahead.
Bankman-Fried had a lot of initial success exploiting something called the Kimchi premium. Bitcoin was cheaper in the US than Korea, so he began buying the digital asset on US exchanges and selling for substantial returns in Korea.
That initial success for Bankman-Fried wasn’t enough though, so in 2019 he founded FTX. That decision was crucial in growing his wealth, and by early 2022, FTX was valued at $40 billion. Since he was the majority owner of FTX, Bankman-Fried became a very rich man, peaking at around $26 billion.
Bankman-Fried also had a reputation in politics. Initially, he was charged with donating $90 million of FTX deposits to political candidates and political action committees. Those charges were later dropped.
The former crypto king also used his money to gain access to celebrities, and wanted them to be synonymous with the FTX name.
They included Tom Brady, his ex-wife Gisele Bundchen, Orlando Bloom, comedian Larry David, NBA legend Steph Curry and tennis star Naomi Osaka.
This façade of success, wealth and fame was all brought to a screeching halt in November 2022, when the exchange began to falter.
By November 11, the jig was up. FTX went bankrupt and Bankman-Fried stepped aside as CEO, letting John J. Ray take over the liquidation of the company.
A month later, Bankman-Fried was arrested.
His monthlong trial began in October 2023, and ended days before the anniversary of the FTX collapse in November 2022. He was sentenced last Thursday to 25 years in jail and is now behind bars.
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
