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.
Read more:
Who is Sam Bankman-Fried?
SBF ‘wanted to be US president’
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.
Thousands of pro-Palestine demonstrators protested in Malmo, Sweden on Thursday against Israel’s competing in this year’s Eurovision Song Contest.
Protesters waving green, white, black and red Palestinian flags packed the historic Stortorget square near Malmo’s 16th-century town hall before a planned march through the city for a rally in a park several miles from the Eurovision venue.
Police estimated that between 10,000 and 12,000 people took part. Among those in the crowd was Swedish climate activist Greta Thunberg.
The march took place at the same time as Israel’s entrant – 20-year-old Eden Golan – was taking part in the final dress rehearsal for the second Eurovision semi-finals, in the Malmo arena.
During the march – which included families with young children, and people with dogs and bicycles – smoke canisters in the colours of the Palestinian flag were set off, with some protesters carrying signs displaying images of Gaza civilians who have been injured amid the Hamas-Israel conflict.
There was also a banner done in the style of Eurovision with the word “genocide” on it – an accusation vigorously denied by Israel amid the war with Hamas.
Security in Malmo is high, and extra police have been drafted in from neighbouring Denmark and Norway.
During an earlier rehearsal on Tuesday, Golan was met with boos and cries of “Free Palestine,” and an audience member appeared to have a Palestinian flag removed from them in the auditorium.
The EBU has said only flags that represent countries taking part, and the rainbow flag, can be brought to the event.
They have said they will remove any other “flags, symbols, clothing, items and banners being used for the likely purpose of instrumentalising the TV shows”.
Israel’s Eden Golan with Hurricane for Israel. Pic: Sarah Louise Bennett/EBU
The 20-year-old singer performed her song Hurricane while flanked by five backing dancers and centred around a large wheel-like prop in the centre of the stage.
Earlier lyric changes
The song has been tweaked three times, after an initial version titled October Rain was ruled too political by the EBU who believed some lyrics referred to the 7 October Hamas attacks on Israel.
Some still believe that some lyrics in the current song – including “Dancin’ in the storm… I’m still broken from this hurricane,” still refer to attacks which killed over 1,000 people and resulted in hundreds of hostages being taken.
In the run-up to the competition – which is the world’s largest live music event – there have been calls for Israel to be banned over their ongoing ground offensive in Gaza.
However, the EBU – which says it is an apolitical organisation – has ruled that Israel can take part as they say it has not broken any broadcasting rules.
The EBU has also condemned harassment and abuse of artists competing in the show and said they form no part of the decision-making process. As it stands no performer has withdrawn from the contest.
Pic: Sarah Louise Bennett/EBU
More than 34,000 people have been killed, and over 77,000 have been injured in Gaza since the conflict began, according to Gaza’s Hamas-led health ministry.
The second-semi finals
The run-through came ahead of the second semi-final this evening, which will choose the final 10 acts to go into the Grand Final.
Other acts taking part in the semi-final tonight include Norway’s Gate, San Marino’s band Megara, Switzerland’s Nemo and Danish entrant Saba, – all of whom called for a ceasefire in Gaza and the “safe return” of Israeli hostages in a joint statement in March.
The UK’s act, Olly Alexander, and Ireland’s Bambie Thug were also part of the joint statement. Both performed in the first semi-final on Tuesday and will be performing in the final.
The artists rejected calls from Palestinian groups to boycott the music contest, saying they “firmly believe in the unifying power of music”.
Golan, who has been performing since she was nine years old, left Israel when she was six to live in Russia with her family, but returned when she was 18.
She told ITV News she could not have asked “for a better year to be representing my country” earlier this week.
The Grand Final will see 26 countries battle it out on Saturday night.
Sky News will be in Malmo with updates, a live blog, and all the biggest news from the contest as it happens.
World
Club World Cup: FIFA threatened with legal action by players and leagues over new men’s competition
FIFA has been warned of a threatened mass revolt and legal action by the world’s footballers and leagues over its new men’s Club World Cup amid welfare concerns.
A letter has been sent by global players’ union FIFPRO and the World Leagues Forum to FIFA president Gianni Infantino demanding the 32-team competition is not played as planned in June and July next year.
Chelsea and Manchester City have qualified for the event, lined up for the United States as part of Mr Infantino’s expansion of FIFA competitions. The union fears this has congested the calendar and endangered the health of players.
Sky News revealed in December concerns from players in England that they are being asked to play too many games with a threat of legal action against football authorities.
Manchester City’s Kevin De Bruyne and Chelsea’s Enzo Fernandez. Both teams have already qualified for the Club World Cup. Pic: Reuters
That has now been stepped up to the global level ahead of key FIFA meetings in Bangkok, Thailand, next week.
FIFPRO Acting General Secretary Stephane Burchkalter and WLA counterpart Jerome Perlemuter wrote to Mr Infantino last week to warn legal advice has been commissioned ahead of potential action against FIFA to force them to resolve concerns.
In a letter obtained by Sky News, they wrote: “We shall be compelled to advise our members on the options available to them, both individually and collectively, to proactively safeguard their interests.”
FIFA, the governing body for world football, has also expanded the World Cup for national teams – growing from 32 to 48 teams for the 2026 edition in North America.
The FIFPRO and WLF letter added: “FIFA has continually and consistently made unilateral decisions that benefit its own competitions and commercial interests, while negatively affecting national leagues and players.
“Over a significant period, FIFA has ignored repeated attempts by leagues and unions to engage on this issue.
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Analysis: ‘Packed’ football calendar
They added: “As a result of FIFA’s recent strategy of expanding its own competitions, the calendar is now beyond saturation, to the point that national leagues are unable to properly organise their competitions, resulting in economic harm, whereas players are being pushed beyond their limits, with significant injury risks and impacts on their welfare and fundamental rights.
“Leagues and players cannot simply be expected to ‘adapt’ to FIFA’s decisions, which are driven by FIFA’s business strategy.
“We have reached the point where this situation must immediately be addressed both from a procedural and substantive perspective.”
Read more:
Sky Sports to show all EFL opening weekend matches for first time
Union threatens legal action over increasing number of matches
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The Club World Cup is set to be staged every four years, replacing the little-regarded annual seven-team event that City won the final version of in December.
After a three-team group stage, there will be another four matches up to the final.
The competition is taking the quadrennial slot used up to 2017 for the now-defunct, eight-country Confederations Cup that served as a World Cup test event.
Sky News has contacted FIFA for comment.
World
Israel-Hamas war: Netanyahu vows his country will ‘stand alone’ if it has to after Biden’s weapons supply threat
Benjamin Netanyahu has vowed Israel will “stand alone” if it has to, after the US threatened to stop sending some weapons to its ally.
The Israeli prime minister said “we shall fight with our fingernails” if needed “but we have much more than fingernails”.
“And with that strength of spirit, with God’s help, together we shall be victorious,” he added.
His remarks in a video statement came after US President Joe Biden vowed to halt offensive weapons supplies to Israel if it attacks the southern Gaza city of Rafah.
Follow latest:
Updates on Israel-Hamas war
An unnamed Israeli operation earlier said Israel will press ahead with its operation in Rafah and elsewhere in the Gaza Strip, Reuters reported.
And chief armed forces spokesperson Rear Admiral Daniel Hagari said Israel’s military has the munitions it requires for the operations.
Palestinian witnesses said Israeli tanks and warplanes have bombarded areas of Rafah on Thursday, according to the same news agency.
Palestinian militant groups Hamas and Islamic Jihad also said their fighters fired anti-tank rockets and mortars at Israeli tanks gathered on the eastern outskirts of the city.
Israel claims four battalions of Hamas fighters are hiding in Rafah, where the population has been swelled by hundreds of thousands of people seeking refuge from bombardments elsewhere in the Palestinian territory.
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