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.
US
Donald Trump plans to hit Canada with new tariff – while warning of blanket hike for other countries
Donald Trump has said he plans to hit Canada with a 35% tariff on imported goods, as he warned of a blanket 15 or 20% hike for most other countries.
In a letter to Canadian Prime Minister Mark Carney, the US president wrote: “I must mention that the flow of Fentanyl is hardly the only challenge we have with Canada, which has many Tariff, and Non-Tariff, Policies and Trade Barriers.”
Mr Trump’s tariffs were allegedly an effort to get Canada to crack down on fentanyl smuggling, and the US president has expressed frustration with Canada’s trade deficit with the US.
In a statement Mr Carney said: “Throughout the current trade negotiations with the United States, the Canadian government has steadfastly defended our workers and businesses. We will continue to do so as we work towards the revised deadline of August 1.”
He added: “Canada has made vital progress to stop the scourge of fentanyl in North America. We are committed to continuing to work with the United States to save lives and protect communities in both our countries.”
Mr Trump has sent a series of tariff letters to 23 countries so far, including one putting a 50% tariff on Brazil in part for the ongoing trial of its former president Jair Bolsonaro for trying to stay in office after he lost the election in 2022.
Mr Trump was similarly indicted for his efforts to overturn his election loss in 2020.
The higher rates would go into effect on 1 August.
Shortly after Mr Trump unveiled his “Liberation Day” tariffs on 2 April, there was a huge sell-off on the financial markets. The US president later announced a 90-day negotiating period, during which a 10% baseline tariff would be charged on most imported goods.
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But in an interview with Sky News’s partner network NBC News, Mr Trump said he plans to impose higher blanket tariffs on most US trade partners.
“We’re just going to say all of the remaining countries are going to pay, whether it’s 20% or 15%. We’ll work that out now,” he said.
He added: “I think the tariffs have been very well-received. The stock market hit a new high today.”
The US and UK signed a trade deal in June, with the US president calling it “a fair deal for both” and saying it will “produce a lot of jobs, a lot of income”.
Sir Keir Starmer said the document “implements” the deal to cut tariffs on cars and aerospace, adding: “So this is a very good day for both of our countries – a real sign of strength.”
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The US president also teased a “major statement” he will make on Russia over its war with Ukraine.
“I’m disappointed in Russia, but we’ll see what happens over the next couple of weeks,” he said.
“I think I’ll have a major statement to make on Russia on Monday.”
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It comes as Russia’s deputy foreign minister, Sergei Ryabkov, said a new round of talks between Moscow and Washington on bilateral problems could take place before the end of the summer.
A Palestinian activist who was detained for over three months in a US immigration jail after protesting against Israel is suing Donald Trump’s administration for $20m (£15m) in damages.
Lawyers for Mahmoud Khalil have filed a claim against the administration alleging he was falsely imprisoned, maliciously prosecuted and smeared as an antisemite as the government sought to deport him over his role in campus protests.
The 30-year-old graduate student at Columbia University told Sky News’s lead world presenter Yalda Hakim being detained by ICE agents in March “felt like kidnapping”.
He described “plain-clothed agents and unmarked cars” taking him “from one place to another, expecting you just to follow orders and shackled all the time”, which he said was “really scary”.
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Mahmoud Khalil reunites with family after release
Mr Khalil said he was not presented with an arrest warrant and wasn’t told where he was being taken.
He said the detention centre he was taken to was “as far from humane as it could be” and “a place where you have no rights whatsoever”.
“You share a dorm with over 70 men with no privacy, with lights on all the time, with really terrible food. You’re basically being dehumanised at every opportunity. It’s a black hole,” he added.
Mr Khalil said he would also accept an official apology from the Trump administration.
The Trump administration celebrated Mr Khalil’s arrest, promising to deport him and others whose protests against Israel it declared were “pro-terrorist, antisemitic, anti-American activity”.
Mr Khalil said after around 36 hours in captivity he was allowed to speak to his wife, who was pregnant at the time.
“These were very scary hours, I did not know what was happening on the outside. I did not know that my wife was safe,” he said.
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‘Absolutely absurd allegations’
Mr Khalil said administration officials had made “absolutely absurd allegations” by saying he as involved in antisemitic activities and supporting Hamas.
“They are weaponising antisemitism, weaponising anti-terrorism in order to stifle speech,” he said. “What I was engaged in is simply opposing a genocide, opposing war crimes, opposing Columbia University’s complicity in the war on Gaza.”
A State Department spokesperson said its actions toward Mr Khalil were fully supported by the law.
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Asked about missing the birth of his son while he was in prison, Mr Khalil said: “I don’t think there’s any word that can describe the agony and the sadness that I went through, to be deprived from such a divine moment, from a moment that my wife and I had always dreamed about.”
Meanwhile, the deportation case against Mr Khalil is continuing to wind its way through the immigration court system.
Donald Trump has praised the Liberian president’s command of English – the West African country’s official language.
The US president reacted with visible surprise to Joseph Boakai’s English-speaking skills during a White House meeting with leaders from the region on Wednesday.
After the Liberian president finished his brief remarks, Mr Trump told him he speaks “such good English” and asked: “Where did you learn to speak so beautifully?”
Mr Trump seemed surprised when Mr Boakai laughed and responded he learned in Liberia.
The US president said: “It’s beautiful English.
“I have people at this table who can’t speak nearly as well.”
Mr Boakai did not tell Mr Trump that English is the official language of Liberia.
The country was founded in 1822 with the aim of relocating freed African slaves and freeborn black citizens from the US.
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Mr Trump promised the leaders of Liberia, Senegal, Gabon, Mauritania and Guinea-Bissau a pivot from aid to trade at the surprise meeting.
He described the countries as “all very vibrant places with very valuable land, great minerals, and great oil deposits, and wonderful people”.
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Later asked by a reporter if he’ll visit the continent, Mr Trump said, “At some point, I would like to go to Africa.”
But he added that he’d “have to see what the schedule looks like”.
Trump’s predecessor, President Joe Biden, promised to go to Africa in 2023, but only fulfilled the commitment by visiting Angola in December 2024, just weeks before he left office.
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