The former cryptocurrency mogul, Sam Bankman-Fried, founder of the now-defunct FTX cryptocurrency exchange, has been convicted on seven counts of fraud and conspiracy. He is accused of defrauding his exchange's customers and investors out of billions. His sentencing is scheduled for March 28, with a potential maximum term of over 100 years.
In the wake of the FTX collapse, the Securities and Exchange Commission (SEC) Chair, Gary Gensler, has stated that a revived FTX could work if new leadership operates within the law. This statement was in response to reports that Tom Farley, a former president of the New York Stock Exchange, is among three bidders vying to buy the bankrupt crypto exchange.
Meanwhile, Bankman-Fried's parents, Joseph Bankman and Barbara Fried, both former Stanford Law professors, face potential criminal exposure for their roles in their son's collapsed crypto empire. Bankman-Fried had given his parents a $10 million cash gift and bought them a $16.4 million property in the Bahamas, which FTX investors and customers have sued to recover. Both parents served as advisers to their son, with Bankman advising on business matters and Fried advising on concealing campaign donations.
The sentencing of Bankman-Fried raises questions about the appropriate punishment for economic crimes. Theories of punishment, including deterrence, retributive justice, and rehabilitation, are being discussed in relation to the case. The case of Bankman-Fried is also being compared with other high-profile economic crime cases.