Sam Bankman-Fried sentencing: Disgraced FTX founder set to study jail destiny for crypto rip-off as his mother and father arrive at court docket for his listening to

Sam Bankman-Fried’s mother and father have arrived at court docket because the fraudster is ready to face justice over stealing $8 billion from traders.  

Joseph Bankman and Barbara Fried, had been noticed arriving on the courthouse for his or her son’s sentencing, set to start out at 9:30am.

Joseph Bankman is a lawyer and a longtime tax professor at Stanford Regulation Faculty. He was employed by FTX to assist with tax points. Barbara Fried can also be a lawyer and a professor Emeritus at Stanford Regulation. 

The mother and father have been accused of getting data of among the fraudulent exercise inside FTX however have not been charged with any crimes. They had been deeded a $16.4 million home within the Bahamas that was virtually definitely bought with FTX buyer funds, in response to court docket testimony.

Sam Bankman-Fried is ready to study his final destiny at the moment in court docket. The prosecution needs the disgraced crypto founder to spend 40 to 50 years behind bars, whereas the protection is asking for a way more lenient sentence of no higher than six and a half years.

Bankman-Fried’s mother and father had been a mainstay on the trial in October 2023, which resulted in a conviction on all counts of fraud and conspiracy. 

They had been usually seen attempting to make eye contact and waving to their son all through the proceedings. Whereas Joseph Bankman was often extra stoic, Barbara Fried was usually extra up entrance along with her feelings. For notably troublesome moments of the trial, she may very well be seen along with her head in her arms or suppressing tears. 

The way it began

Bankman-Fried, the son of two Stanford professors, had a charmed upbringing in California. 

In April 2019, after a six-year profession in varied buying and selling corporations, the then 27-year-old based FTX amid a increase in crypto. 

He advised the world he deliberate to present away his quickly-amassed fortune by the point the bubble burst, and lauded within the world reward of turning into the richest billionaire underneath 30. 

Enterprise capitalists lined as much as put money into the blossoming platform and SBF, as he has turn into recognized, turned a poster-boy of the crypto world. 

The corporate’s brand turned ubiquitous in pop-culture. 

Then, the ‘crypto winter’ of 2022 hit, wiping out accounts because the unpredictable and largely unregulated market tumbled. 

Behind the scenes, SBF’s father or mother firm, Alameda Analysis began borrowing to put money into corporations in an try to preserve the market going.  

FTX was fantastic…till it wasn’t

In November 2022, because the partitions had been closing in, SBF tried to reassure traders. 

Bankman-Fried’s November 7 tweet would come again to hang-out him numerous instances throughout his trial.

‘FTX is ok. Belongings are fantastic,’ he wrote.

Lower than a yr later, FTX co-founder Gary Wang would say the precise reverse on the stand.

‘FTX didn’t have sufficient property for buyer withdrawals,’ Wang testified in October 2023. ‘FTX didn’t in reality have sufficient property to cowl all shopper holdings…as a result of Alameda had withdrawn a whole lot of it.’

Alameda is a reputation you may hear rather a lot. Bankman-Fried based Alameda Analysis as a crypto buying and selling agency in 2017. Prosecutors argued Alameda was the automobile for stealing FTX buyer deposits.

The primary signal of bother got here on November 2, when crypto information web site CoinDesk revealed an Alameda steadiness sheet.

The steadiness sheet confirmed {that a} substantial portion of Alameda’s property had been held in FTT, FTX’s proprietary token. In accordance with eager watchers of the crypto trade, this appeared extremely dangerous as a result of FTT was basically a made-up foreign money by Bankman-Fried, but it was serving as collateral for lots of the hefty loans granted to Alameda for buying and selling functions. 

Bankman-Fried and Ellison’s subsequent makes an attempt to downplay the CoinDesk story proved fruitless as a result of by round November 8, a traditional financial institution run was in full swing. FTX processed billions of {dollars} value of panic withdrawals.

Because the chaos continued, rival crypto trade Binance provided to purchase out FTX. FTX customers rejoiced.

But it surely wasn’t meant to be, as a result of after one take a look at FTX’s books, then-CEO of Binance Changpeng Zhao backed out of the deal on November 9, simply sooner or later after saying the doable buyout.

By November 11, the jig was up. FTX went bankrupt and Bankman-Fried stepped apart as CEO, letting John J. Ray take over the liquidation of the corporate.

Bankman-Fried’s arrest and pre-trial detention

Bahamian authorities did not arrest Bankman-Fried till December 12, 2022, a month after the FTX implosion. In accordance with many authorized professionals, this left him loads of time to incriminate himself by taking interviews with anybody who would pay attention.

One his most recognizable interviews was with ABC’s George Stephanopoulos, a lot in order that clips from it had been performed through the trial. He advised Stephanopoulos he did not know FTX buyer funds had been getting used to repay Alameda’s mortgage obligations.

A couple of week after that interview, Bankman-Fried was arrested within the Bahamas. He was detained for a short time in Fox Hill jail, the one authorities detention heart on the island. Then he was extradited to the US the place he was on home arrest at his mother and father’ comfortable house in Palo Alto, California.

That lasted till August 11, 2023 when Choose Kaplan dominated that Bankman-Fried violated his $250 million bail by leaking letters from his ex-girlfriend Caroline Ellison to the New York Instances. Prosecutors accused Bankman-Fried of doing this, and the court docket deemed the leak to be an try from him to intimidate Ellison and paint her in a foul mild forward of her testifying in opposition to him.

Since then, Bankman-Fried has been locked up at on the Metropolitan Detention Heart in Brooklyn. 

Highlights from the trial   

Bankman-Fried’s October trial lasted a month, with the federal government calling over a dozen witnesses to the protection’s three. Probably the most explosive testimony got here from different FTX executives, together with his ex-girlfriend Caroline Ellison.

The federal government claimed that billions value of buyer cash was funneled out of FTX and into Alameda to pay again the eye-watering loans it had taken out from crypto lenders.

Naturally, because the CEO of Alameda, Caroline Ellison arguably had among the most explosive testimony. 

Ellison testified in October that Alameda took FTX deposits for ‘no matter’ it wanted and that Bankman-Fried ‘directed me to commit these crimes.’

A part of what Ellison mentioned Bankman-Fried instructed her to do was to draft seven completely different steadiness sheets to ship to Genesis, one in all Alameda’s important lenders, when it recalled its $500 million mortgage to Alameda.

He and Ellison agreed to ship a falsified steadiness sheet that understated Alameda’s liabilities and omitted any point out of it borrowing cash from the FTX trade, aka prospects, Ellison testified.

All advised, Ellison mentioned Alameda took about $14 billion from FTX prospects over the agency’s lifetime. 

Pleas for mercy 

Since his arrest and conviction, SBF’s attorneys have made repeated pleas for leniency. 

From his veganism to appeals from his mother and father and thriller associates who wished to vouch for his bail, the as soon as impermeable crypto-king has dropped contrition and begged for his freedom. 

His destiny now lies within the arms of US District Choose Lewis Kaplan, the no-nonsense justice who presided over Donald Trump’s E. Jean Carroll case.