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.
Nicholas Rossi, an American man who faked his death and fled to Scotland to escape rape charges, has been jailed for at least five years.
The sentence handed down to the 38-year-old is the first of two he faces after being convicted separately in August and September of raping two women in 2008.
Utah has “indeterminate sentencing” – meaning jail terms handed down are in a range of years rather than a fixed number, with release dates set by the state’s parole board.
Nicholas Rossi appearing in court in August. Pic: AP
During August’s three-day trial, Rossi’s accuser and her parents took the stand – with the victim telling the court that he left a “trail of fear, pain, and destruction” behind him.
“This is not a plea for vengeance. This is a plea for safety and accountability, for recognition of the damage that will never fully heal,” she said.
Brandon Simmons, a prosecutor in the case, alleged Rossi “uses rape to control women” and posed a risk to community safety.
Rossi – whose legal name is Nicholas Alahverdian – maintained his innocence during the sentencing hearing. In a soft, raspy voice, he said: “I am not guilty of this. These women are lying.”
He was first identified in 2018 after a decade-old DNA rape kit was examined.
How Rossi was caught
But in February 2020 – months after he was charged in one of the cases – an online obituary claimed he had died of non-Hodgkin lymphoma.
Rossi was arrested in Scotland the following year while being treated for COVID, after hospital staff recognised his distinctive tattoos – including the crest of a university he never attended.
A protracted court battle meant he wasn’t extradited until January 2024, with Rossi claiming he was an Irish orphan named Arthur Knight who was being framed.
Investigators identified at least a dozen aliases that he had used to evade capture over the years.
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One of his victims had been recovering from a traumatic brain injury when she responded to a personal advert that Rossi had posted on Craigslist.
They began dating and were engaged within a couple of weeks – and according to her testimony, Rossi had asked her to pay for dates and car repairs, lend him money, and take on debt for their rings.
She told the court that Rossi raped her in his bedroom one night after she drove him home – and went to police years later after discovering that another woman in Utah had come forward with accusations.
Rossi is due to be sentenced for the second conviction in November.
US
‘Ukraine can’t win war,’ says Trump – as reports emerge of another tumultuous meeting with Zelenskyy
Donald Trump has said he doesn’t think Ukraine can win the war against Russia – as reports emerge of a less-than-harmonious meeting between the US president and Volodymyr Zelenskyy .
Asked about the conflict by a journalist during a visit to the White House by Australian Prime Minister Anthony Albanese, the Mr Trump responded bluntly: “I don’t think they will,” before adding: “They could still win it, I never said they would win it… War is a very strange thing, a lot of bad things happen.”
It is a marked change from his comments a few weeks ago at a UN gathering in New York where he said Ukraine could retake “all of its territory”.
And it comes after the Financial Times claimed the behind-the-scenes of Mr Trump and President Zelenskyy’s meeting in Washington on Friday had descended into a “shouting match”.
According to the paper, the US president repeatedly told his Ukrainian counterpart to accept Vladimir Putin‘s terms for ending the war – warning him that the Russian leader would “destroy” Ukraine if it did not agree.
Mr Zelenskyy later attempted to pour water over the suggestions, saying their meeting was “positive” and that Ukraine was preparing a contract to buy 25 Patriot air defence systems as a result of their talks.
However, Mr Zelenskyy said he did not secure the Tomahawk missiles he had wanted for Ukraine. The long-range missiles would have been a major boost for Kyiv.
“In my opinion, he does not want an escalation with the Russians until he meets with them,” Mr Zelenskyy said.
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Why Tomahawks are off the table
Meanwhile, Hungary’s foreign minister Peter Szijarto has announced he will visit Washington on Tuesday. It follows claims from Mr Trump that he would meet with Russian President Vladimir Putin in Budapest soon.
Will the pair meet again soon? File pic: Reuters
And on Monday, US secretary of state Marco Rubio had a phone call with Russia’s foreign minister Sergei Lavrov.
According to the state department, Mr Rubio and Mr Lavrov spoke about possible concrete steps to implement understandings reached during the call between Mr Trump and Mr Putin last week.
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Mr Rubio had, a statement said, also “emphasised the importance of upcoming engagements as an opportunity for Moscow and Washington to collaborate on advancing a durable resolution of the Russia-Ukraine war, in line with President Trump’s vision”.
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Also on Monday, French president Emmanuel Macron announced there will be a meeting of the coalition of the willing in London on Friday which Mr Zelenskyy will attend.
The coalition – co-chaired by Sir Keir Starmer, Mr Macron and Germany’s Chancellor Friedrich Merz – has the aim of bringing countries together to protect a peace deal in Ukraine.
Dozens of websites, banks and apps are being affected by a major internet outage.
The problem, which started on Monday morning, appears to be related to an issue at Amazon Web Services (AWS).
As of 9.20am, there were more than 2,000 reports of the Amazon Web Services outage in the US alone, according to Downdetector, which monitors issues and outages in real-time.
On its service status page, the company said it was seeing “increased error rates” and delays with “multiple AWS services”.
Here’s what we know so far.
Pic: PA
Pic: PA
Pic: PA
What has been affected?
Multiple banks, the HM Revenue & Customs (HMRC) website, mobile phone networks and video-chatting platform Zoom are among the websites having technical issues.
All Amazon products – including Prime Video and Amazon Music – have also been affected, as well as the main Amazon website.
Here’s a full list of what has been affected by the internet outage, according to Downdetector:
• Snapchat
• Ring
• Roblox
• Amazon Web Services
• Life360
• My Fitness Pal
• Amazon
• Xero
• Signal
• Canva
• Fortnite
• Blink Security
• Zoom
• HMRC
• Clash Royale
• Clash Of Clans
• Asana
• Wordle
• Slack
• Smartsheet
• Epic Games Store
• Duolingo
• Amazon Alexa
• Jira
• Vodafone
• Tidal
• Coinbase
• Atlassian
• IMDB
• Amazon Prime Video
• Pokemon Go
• BT
• Peloton
• EE
• Ancestry
• Square
• Playstation Network
• Eventbrite
• Amazon Music
• Sky
• Flickr
• Hay Day
• Rocket League
• Perplexity AI
• Dead By Daylight
• Bank Of Scotland
• Lloyds Bank
• Halifax
What has AWS said?
AWS confirmed it was suffering from “increased error rates and latencies” for multiple services.
In a statement on its website, the company said: “We are actively engaged and working to both mitigate the issue and understand root cause,” an update on its website says.
“We will provide an update in 45 minutes, or sooner if we have additional information to share.”
The company is posting regular updates on the situation and said its engineers were “immediately engaged” as soon as they spotted the issue.
Concentrated in the US
ThousandEyes, a website that tracks the performance of local and wide area networks, servers and applications, shows many of the outages appear to be concentrated in the US.
A large portion is focused in Virginia, which is widely considered as the global capital for data centres.
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