The most significant event that marked the year 2022 for cryptocurrencies was the collapse of FTX. It was a challenging period. However, SBF could be brought to the courtroom for a major penalty that will go down in history. Many investors believed that due to political connections, the founder of FTX would not be punished, but when the entire team turned into informants, there was no other option.
Statements by the FTX Founder
SBF, who started testifying on October 27, had difficulty giving his first statement during the trial. The next day, on October 28, he appeared more prepared. As we mentioned before, the fact that his colleagues, whom he defrauded together with, became informants, complicates Sam’s situation. Of course, his interviews where he confessed his own crime, and his Twitter Space broadcasts should not be forgotten.
A few details stand out in his latest statement:
- Claims that he did not direct the political donations in 2021
- Claims that FTX’s terms of use included the relationship with Alameda
- In 2021 and 2022, he requested additional risk hedging strategies for Alameda
These trials will come to an end for SBF on Monday. Afterwards, the prosecution’s cross-examinations and the closing arguments of both sides are expected.
How Many Years of Sentence Will SBF Receive?
If Bankman-Fried is convicted of fraud and conspiracy charges, he is expected to receive a 115-year sentence. One of the main reasons for the collapse of FTX was the massive positions taken with customer balances through Alameda. The majority of his sentence comes from here. Unauthorized use of customer assets and erosion of capital in risky positions is not something that SBF can explain with any defense.
As we mentioned last year, the collapse is connected to the bankruptcy of Terra. The market is full of risks, and large companies open hedge positions to minimize these risks. The founder of FTX claims to have instructed the opening of billion-dollar BTC hedge positions before the market crash. However, this was never done.
Without appropriate risk hedging measures, Alameda suffered significantly from the collapse of the Terra ecosystem and the decline in crypto prices. In September 2022, Bankman-Fried learned that the debt between the companies had increased from 2 billion dollars a year ago to over 8 billion dollars.
Finally, it is alleged in the document submitted to the court that there is a clause in the user registration agreement stating that “losses among customers using margin trading and futures contracts will be distributed if the exchange’s risk engine fails.” However, this is not a valid excuse for Alameda to sink customer assets and lead FTX to collapse.
In conclusion, it seems that SBF will receive a sentence of over 100 years, leaving a mark on crypto history.
