Sam Bankman-Fried sentence: After years of ‘hubris, incompetence and greed’, crypto king’s jail term is end of an era
Sam Bankman-Fried was breathlessly described as a wunderkind – a boy wonder transforming the world of finance.
Renowned for his messy hair and unkempt appearance, he graced the covers of Forbes and Fortune, who pondered whether he could become the next Warren Buffett.
The 32-year-old was the founder of FTX, which had quickly become the world’s second-largest cryptocurrency exchange – a place where investors could buy and sell digital assets like Bitcoin.
Larry David appeared in an advert for FTX during the Super Bowl in 2022
Star-studded adverts featuring the tennis player Naomi Osaka and the comedian Larry David added to its allure – with eye-watering sums spent on sponsorship deals.
But in November 2022, Bankman-Fried’s crypto empire came crashing down after it emerged that customer funds worth $10bn (£7.9bn) was missing.
A year later, a jury convicted the fallen entrepreneur of fraud and money laundering after just five hours of deliberations – based on evidence from close colleagues who had turned against him.
Now, “SBF” is beginning a lengthy prison sentence of 25 years for what prosecutors have described as “one of the biggest financial frauds in American history”.
His punishment may be little comfort to five million FTX customers who were suddenly locked out of their accounts as the company entered bankruptcy – and are yet to receive any compensation.
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November: ‘Crypto king’ guilty of fraud
An estimated 80,000 of Bankman-Fried’s victims were based in the UK. Some of them had millions of pounds tied up in the company after entrusting him with their life savings.
While slick marketing campaigns had presented FTX as a safe way to invest in volatile cryptocurrencies, the reality behind the scenes couldn’t have been more different.
Secret back doors had been established that allowed SBF’s other company, Alameda Research, to access money belonging to FTX customers and make risky bets without their knowledge.
Meanwhile, executives were spending lavishly. Private jets ferried Amazon orders from Miami to the firm’s headquarters in the Bahamas, £12m was spent on luxury hotel stays in just nine months, and employees in the US were allowed to order £160 of food deliveries each a day.
The fallout from FTX’s demise also reaches as far as the White House. Bankman-Fried was one of the largest donors to Joe Biden’s campaign in 2020, with the president subsequently facing pressure to return millions of dollars.
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Sam Bankman-Fried’s colleague and on-off girlfriend Caroline Ellison testified against him. Pic: Reuters
A new chief executive has been tasked with untangling where all the money went. Soon after FTX went under, he said: “Never in my career have I seen such a complete failure of corporate controls.”
Unusually, and thankfully, FTX victims are expected to be compensated in full eventually – kind of.
The payouts they receive will be based on what cryptocurrencies were worth in November 2022. But Bitcoin was trading at £16,000 back then and is now worth £55,500.
Bizarre plans to bring FTX out of bankruptcy and reopen the exchange have also been abandoned.
Other entrepreneurs in this space – who had loyal, cult-like followings and huge profiles – are also facing jail time.
Changpeng Zhao has pleaded guilty to money laundering charges. Pic: Reuters
Changpeng Zhao, who ran the world’s biggest crypto exchange Binance, sensationally resigned last year after pleading guilty to money laundering violations in the US.
His company had allowed individuals in Syria, Iran and Russian-occupied parts of Ukraine to evade economic sanctions – and allegedly made it easy for terrorists and criminals to move money.
The billionaire faces jail time when he is sentenced next month.
Do Kwon created two cryptocurrencies that spectacularly collapsed in May 2022, with investors losing an estimated $40bn (£31.7bn) in a matter of days.
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He later went on the run but was captured in Montenegro last year after attempting to fly to Dubai using a fake passport.
A civil fraud trial against Kwon and his company Terraform Labs began this week, with prosecutors warning: “Terra was a fraud, a house of cards, and when it collapsed, investors nearly lost everything.”
Do Kwon created two cryptocurrencies that lost tens of billions of dollars – then went on the run. Pic: Reuters
In a way, Bankman-Fried’s sentence marks the end of an era for crypto – when extravagant excesses and a lack of regulatory oversight were the norm.
Bitcoin’s recent gains have been driven by regulated products that allow investors to gain exposure to the cryptocurrency’s price without owning it directly.
And many of these products are offered by established, traditional finance firms like BlackRock, which is the world’s largest asset management company.
A damning report described the rise and fall of FTX as a tale of “hubris, incompetence and greed” – with Bankman-Fried and his inner circle showing little regard for the financial wellbeing of his customers.
Millions of people had their fingers burned, and many will be put off from ever investing in cryptocurrencies again.
But while the industry has learned some lessons, the crypto market’s rapid surge in recent months mean there’s a real risk of another bubble forming – and new bad actors taking advantage of investors looking for a piece of the action.
World
Om Fahad: Iraqi social media influencer shot dead by gunman on motorbike who posed as food delivery rider – report
A well-known Iraqi social media influencer has reportedly been shot dead in her car by a gunman on a motorbike.
Om Fahad, whose real name is Ghufran Sawadi, was killed outside her home in Baghdad’s Zayouna district on Friday, according to the AFP news agency, citing security officials.
It appears the unidentified attacker pretended to be delivering food to the victim, one security source said.
Om Fahad, who has nearly half a million TikTok followers, became famous for posting light-hearted videos where she dances to Iraqi music.
Six days ago, she shared footage of herself driving in a car and also posing in front of a mirror. They have each been watched hundreds of thousands of times.
The influencer was sentenced to six months in prison in February last year for sharing videos that a court ruled contained “indecent speech that undermines modesty and public morality”.
A campaign was launched in 2023 by the Iraqi government to clamp down on social media content which broke the country’s “morals and traditions”.
The interior ministry set up a committee to look for “offensive” clips on platforms such as TikTok and YouTube, with several influencers being arrested.
“This type of content is no less dangerous than organised crime,” the ministry declared in a promotional video which asked the public to help by reporting such content.
“It is one of the causes of the destruction of the Iraqi family and society.”
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Speaking last year, interior ministry spokesman Saad Maan argued the morality campaign has “nothing to do with freedom of expression”.
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In 2018, gunmen in Baghdad shot dead Tara Fares, who was a model and influencer.
After years of war and sectarian conflict following the 2003 US invasion that overthrew dictator Saddam Hussein, Iraq has returned to some semblance of normality despite sporadic violence, political instability and corruption.
But civil liberties, particularly among women and sexual minorities, are still constrained in a conservative and male-dominated society.
In the nation of ‘Cade Mile Failte’ (a hundred thousand welcomes), the residents of Coolock want to shut the door.
They’ve set up an anti-immigrant camp in the north Dublin suburb, outside a disused factory earmarked to house asylum seekers.
With green, white and orange, they’re staking claim to this ground, their protest tents bedecked with dozens of Irish flags.
Car horns blast every four or five seconds, in response to a large poster reading: “Beep if you support Coolock.”
Their other roadside banners state: “Community concern over 1,000 male migrants being housed in this building” and “Irish lives matter”.
The camp is occupied 24 hours a day, with young men guarding it overnight and residents of all ages during the day.
Two elderly women, two younger women and half a dozen men of various ages were on site when we arrived.
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The camp was marked with a number of Irish flags
Sean Crowe, who describes himself as “a concerned parent”, said: “Coolock’s message is we don’t want them here, we just don’t want them, end of story.
“We have our own gangs and trouble going on that we can’t sort out. The place is bad enough as it is.”
“It’s just going to put more of a strain,” the father-of-one added.
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Asked how he would reply to those who describe protesters as “racist”, he replied: “It’s not about racism.
“It’s about the strain it’s going to put on the community and local amenities around the place.
“That’s all it’s about, concerned parents.”
The camp at Coolock is just one of several that have sprung up across the Republic in the past year.
In several places, like Newtownkennedy in County Wicklow, the tension has reached breaking point, with public order police officers deployed.
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“We fear they’re going to do the same thing here,” said one protestor at Coolock, who wished to remain anonymous.
“If the Gardai [Irish police] attempt to shut down our peaceful protest, all hell will break loose here,” she added.
With the sun shining and the smell of meat cooking on their barbecue, it had a community feel about it.
But they’re fiercely critical of their current government and you can sense that the tension isn’t far beneath the surface.
“Eighty percent of them are crossing the border from Northern Ireland and they knew that would happen,” Sean told me.
“It’s time to close the border” are not words you expect to hear, when Ireland fought hard to keep it open.
World
Family protests outside suspected serial killer’s lair as they wait for news of teenager who went missing 12 years ago
The family of a missing high school student who may have been the first victim of a suspected serial killer in Mexico City have protested at the site where bones were found last week.
The bones were discovered with the belongings of at least six women, police said, and Amairany Roblero’s relatives have been told that evidence was found relating to her 2012 disappearance.
Ms Roblero was 18 when she vanished and, as is often the case in Mexico, her family was left to investigate her disappearance with little help from prosecutors.
Family friend Alejandra Jimenez said: “The prosecutors had the case file but they didn’t ever give any results to her parents.”
Instead, her parents printed flyers and gave them out near her school – the last place she was seen – but they had “nothing, nowhere to start, nor any directions to the end”, Ms Jimenez added.
Friends and family holds images of women who have gone missing. Pic: AP
A suspect, identified only by his first name, Miguel, was detained by neighbours and police last week after he is alleged to have killed a seventh young woman.
He is accused of waiting for a woman to leave her apartment and then rushing inside to sexually abuse and strangle her 17-year-old daughter.
The woman returned to the apartment to see the suspect leaving and she was slashed across her neck before he ran off.
She survived but her daughter died.
Investigators searched a room rented by the suspect and found bones, mobile phones and ID cards belonging to several women in the same block, thought to be mementos.
Miguel is awaiting trial on charges of murder and attempted murder relating to the most recent victims.
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City prosecutor Ulises Lara insisted the suspect was difficult to catch because “he showed no signs of violent or aggressive behaviour in his daily life”.
Ms Roblero’s family and friends were not accepting this, however.
“They (authorities) have all the means to look for missing people,” Ms Jimenez said. “Instead of focusing on their political campaigns, they should help all the women who are looking for their children.”
Keep up with all the latest news from the UK and around the world by following Sky News
Juan Carlos Gutierrez, a lawyer representing the family of another victim, was also frustrated, asking why no investigation had never been launched in that case, despite missing person reports being filed in 2015.
Ms Jimenez said Ms Roblero’s family had not been told which of the items or remains in the apartment had been linked to her, adding: “This is wearing her parents down physically, mentally.”
Some 2,580 women were murdered in Mexico in 2023, according to the country’s National Public Security System but poorly funded and badly trained prosecutors have failed to stop serial killers over the years.
In 2021 a serial killer in Mexico City killed 19 people but their bodies were only found, buried at his house, after the wife of a police commander became one of the victims.
In 2018 another serial killer in Mexico City murdered at least 10 women and was only stopped after he was seen pushing a dismembered body down the street in a pram.
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