Sam “SBF” Bankman-Fried, the ex-CEO of FTX, was sentenced to 25 years in prison by Judge Lewis Kaplan, after his conviction on seven felony charges linked to FTX's 2022 collapse. Kaplan made sure to mention Bankman-Fried's witness tampering and perjury, and rejected the defense's attempts to downplay the $11-billion financial damage to investors, lenders, and customers. Meanwhile, FTX is selling its Solana holdings at a massive discount amid its bankruptcy proceedings, raising concerns among creditors about the management of assets. Additionally, the sentencing of SBF sparked the creation of memecoins that surged in value but quickly plummeted.
The Final Verdict
Sam “SBF” Bankman-Fried, the former CEO of the crypto exchange FTX, has been sentenced to 25 years in prison by Judge Lewis Kaplan of the United States District Court for the Southern District of New York. The sentence comes after Bankman-Fried's conviction on seven felony charges related to the collapse of FTX in November of 2022. He is the first person connected to FTX and Alameda Research to be incarcerated after the exchange's downfall.
In his ruling, Judge Kaplan pointed out instances of witness tampering and perjury by Bankman-Fried, emphasizing the gravity of his actions despite acknowledging his "social awkwardness." The severity of the crimes was also brought to light by former Alameda Research CEO Caroline Ellison’s testimony, indicating Bankman-Fried's awareness of his culpability yet his refusal to admit any wrongdoing. Kaplan called Bankman-Fried's conduct during the trial evasive and uncooperative, an attitude he remarked as unprecedented in his almost three decades of judicial service.
The judge ordered an $11-billion judgment against Bankman-Fried, reflecting the enormous financial losses suffered by FTX investors, lenders, and customers. Despite arguments from the defense attempting to minimize these losses, Kaplan rejected these claims, stating that any subsequent recovery in cryptocurrency values does not diminish the severity of the crimes committed.
During the sentencing, Bankman-Fried expressed his regret over the events leading to FTX's collapse, suggesting the exchange might have survived under different circumstances. However, his defense's portrayal of him as a non-malicious, mathematically driven individual did not sway the court's decision at all. Testimonies from victims, like U.K. national Sunil Kavuri, shed light on the lasting impact of FTX's collapse on people’s lives, challenging narratives that downplayed the financial damages experienced by those affected.
Now, four other people associated with FTX and Alameda, who have pleaded guilty and accepted deals, await their sentencing, with Ryan Salame's hearing scheduled for May 1.
FTX to Sell Solana Holdings
FTX is now in the process of selling its holding of 41 million Solana (SOL) tokens at a massive discount, amid the ongoing legal controversy after the platform's dramatic collapse. According to statements made by FTX creditor Sunil Kavuri during the sentencing of Sam Bankman-Fried, not all customers of the exchange have been compensated through the bankruptcy process just yet. Kavuri criticized the actions of FTX's bankruptcy counsel, Sullivan & Cromwell, for allegedly mishandling the liquidation of the exchange's crypto assets, including selling Solana tokens at a deep discount to their market value.
FTX’s Solana tokens will be sold at about $60 each to institutional investors, which is a 68% discount from their current market price. This move has sparked further dissatisfaction among creditors. The backdrop of this controversial sale includes allegations from creditors that their rights have been overlooked in the rush to liquidate FTX's holdings. This was basically confirmed when a Canadian blockchain firm, Neptune Digital Assets, confirmed its purchase of 26,964 SOL tokens at a similar discount, under terms matching the FTX estate's offer.
The case has now been further complicated by a class action filed by FTX creditors against Sullivan and Cromwell, accusing the firm of complicity in the FTX fraud prior to its appointment as bankruptcy counsel.
Bankman-Fried Memecoins Soar and Plummet
Meanwhile, the crypto community witnessed the birth of new memecoins amid the historic sentencing of Sam Bankman-Fried. Hours before the sentencing, a developer launched a memecoin named Sam Baseman Fraud, humorously tagged with the ticker FTX, on the Coinbase layer-2 network, Base.
This coin experienced a huge price surge, rallying by more than 23,300% in just seven hours, with its market capitalization hitting $1.5 million, according to DexScreener data. However, in typical memecoin fashion, it saw a drastic sell-off, losing over 85% of its value in a mere three hours.
Adding to the frenzy, another memecoin inspired by Sam Bankman-Fried, called Som Bonkmon Fraud, was launched on the Solana platform shortly after the sentencing. It quickly reached a market cap of $20 million, a massive 18,000% increase from its initial value. Yet, it faced a swift downturn, with its value plummeting by over 95% from its high.
These Bankman-Fried-themed memecoins join a growing list of tokens inspired by crypto and political figures, capitalizing on current events and public interest. The trend is part of a broader resurgence in memecoins, led by the rise of Dogwifhat on Solana, which saw its market cap explode from $50,000 to $3.5 billion in just four months.
Notably, the FTX Token (FTT), the native cryptocurrency of the FTX exchange, also experienced a downturn, dropping over 16% in the wake of Bankman-Fried’s sentencing.
