Cryptocurrency prodigy sentenced to 25 years in prison: 10 things you need to know about “King of Cryptocurrency” Sam Bankman Freed

Just a year ago, Sam Bankman Freed (aka SBF) was hailed as a child prodigy. His FTX exchange grew rapidly, processing trades at a rapid pace and charging lower fees than its competitors. His personal fortune soared and he became a millionaire. But today, SBF found himself a felon sentenced to 25 years in prison for orchestrating his $8 billion fraud. This dramatic fall from grace has left many wondering why everything went so wrong.

• In 2019, SBF co-founded FTX, a cryptocurrency exchange that promises lower fees and faster trading. It quickly grew to become the second largest cryptocurrency exchange in the world. His net worth peaked at an estimated $26.5 billion, according to Forbes magazine.
• SBF developed the personality of an excellent and eccentric leader. He became a media darling, appearing on financial news programs such as Bloomberg and interacting with celebrities like Tom Brady.
• Although it appeared to be a success on the surface, cracks began to show. The WSJ report raised questions about FTX's complex financial structure and its reliance on FTT, a digital token that FTX created in May 2019.
• In November 2022, a liquidity crisis at FTX's sister company Alameda Research triggered a domino effect. Investors panicked and FTX filed for bankruptcy, Reuters reported.
• SBF was arrested in the Bahamas and charged with eight federal charges, including wire fraud, securities fraud and money laundering. His $26 billion net worth disappeared overnight.
• SBF pleaded not guilty and pleaded not guilty. His lawyer argued that he did not know the full extent of the fraud charges.
• The highly anticipated trial revealed a reckless culture at FTX with lax controls and questionable accounting practices.
• Three weeks later, a jury found SBF guilty on all eight charges. As quoted by the Washington Post, the judge called it “one of the biggest financial frauds in American history.”
• In a packed courtroom, SBF was sentenced to 25 years in prison, a stark reminder of the consequences of white-collar crime.
• The collapse of FTX shocked the crypto industry and raised questions about regulation and investor protection. The story of SBF is a cautionary tale for anyone tempted by the lure of easy money and ambition.