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Sam Bankman-Fried Caused Victims “Irreparable Harm”, But Will It Affect FTX Founder Sentencing?

Last Updated March 20, 2024 11:37 AM
Teuta Franjkovic
Last Updated March 20, 2024 11:37 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • FTX Victims detail emotional and financial ruin caused by FTX’s collapse, urging accountability for Bankman-Fried.
  • SBF’s lawyers withdraw due to conflict of interest, highlighting ongoing legal battles.
  • Prosecutors recommend a 40 to 50 year sentence and $11 billion penalty for the disgraced former billionaire.

Ahead of Sam “SBF” Bankman-Fried’s sentencing, victims of the FTX collapse shared the profound emotional and financial toll it took on them.

Their statements underscored the profound impact of the former CEO’s actions and the firm’s failure.

FTX Victims in Court: “Devastated” by Losses (Emotional, Financial)

On March 18, in the Southern District of New York, prosecutors submitted victim impact statements  concerning Sam Bankman-Fried and other former executives of FTX and Alameda. These filings highlighted the extensive emotional and financial harm suffered by victims, with most personal details redacted to safeguard their privacy, except for a statement representing BlockFi users.

An unidentified victim shared  the collapse of FTX shattered both their trust and financial investments. The victim put their money in the exchange because they believed in its integrity. This resulted in a significant loss of over $19,000, deeply impacting their faith in the digital asset industry.

They added :

“The repercussions of this event extend beyond mere numbers […] the emotional and psychological toll has been equally devastating, impact our relationship and future planning.”

FTX Victims Demand Justice

Victims of FTX’s collapse have shared the profound emotional distress it caused. They highlighted uncertainties about their futures and strained personal relationships. There’s a strong demand for Bankman-Fried to be held accountable for his role in the cryptocurrency exchange’s downfall.

Mohsin Meghji, the plan administrator for BlockFi during its wind-down process, expressed , through legal representation, that Bankman-Fried’s illegal actions have caused irreversible damage to numerous BlockFi customers. Meghji criticized the disgraced former billionaire’s attempts to downplay the severity of the harm as both offensive and unacceptable.

In November 2023, Sam Bankman-Fried was found guilty on seven felony charges. Throughout his trial, the former FTX CEO took the stand in his own defense. At the time, he mainly attributed the exchange’s collapse to factors other than his own actions.

 DOJ Pushes for Decades in Prison, $11 Billion Penalty

The Southern District of New York’s Department of Justice, in a sentencing memo , accused Bankman-Fried of investor deception, distributing fake documents, and making illegal political donations, suggesting a 40 to 50-year sentence. They also recommended an $11 billion penalty and asset forfeiture. The department also said the sentence should reflect the severity of his actions, deter future fraud, and signal the serious consequences of financial misconduct to others.

Prosecutors have requested  an $11 billion judgment against Bankman-Fried. They said this was, in fact, a cautious estimate, considering over $1 billion has already been seized. They added that political donations made by Bankman-Fried and other FTX executives were the most significant campaign finance violation on record.

In February, tmBankman-Fried, appeared in court, where he acknowledged potential conflicts of interest regarding his representation by attorneys who were also representing Alex Mashinsky, the former CEO of Celsius. Following this, Christian Everdell, Mark Cohen, and other lawyers who defended Bankman-Fried withdrew from the case.

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