March 4, 2024

You thought the cryptocurrency hoopla was over and done? Nope. In fact, convicted scam artist Sam Bankman-Fried might benefit from a resurgence of the crypto market by receiving a much lighter prison sentence than originally expected. “Fool me once, shame on you; fool me twice, shame on me” apparently isn’t a thing anymore.

A brief review: Bankman-Fried was convicted on November 2, 2023 of all seven fraud and conspiracy counts he faced for swindling investors in FTX, his crypto exchange company. The total losses from illegally managed assets were almost $9 billion when FTX filed for bankruptcy in November of 2022. Bankman-Fried is facing more than 20 years in prison. His sentencing is scheduled for March 28. 

But there’s a twist: In the 15 months since FTX collapsed, the crypto market has had a stunning resurgence, which will likely allow FTX customers and creditors to be repaid nearly in full, according to an attorney for the debtors. The market shift, combined with with an equity stake in a crypto unicorn, Anthropic, may help FTX administrators recover $7.8 billion. Details and sales still need to be worked out.

Yet another twist: Many FTX investors who once screamed for Bankman-Fried’s head when all appeared lost are now complaining that simply being made whole isn’t enough! They’re aggrieved that they won’t be repaid an amount reflecting the 150% market gains since the bankruptcy. That can’t happen because FTX is dead and is now just liquidating assets. But you still have to marvel at their greed.

As for Bankman-Fried, he now wants a sentence of no more than 63 months. So I guess if you robbed a bank of billions but returned the money a few years later, it wasn’t that big of a crime?

UPDATE 3/28/24:

Samuel Bankman-Fried was sentenced to 25 years in prison, three years of supervised release, and ordered to pay $11 billion in forfeiture for his orchestration of multiple fraudulent schemes, according to the U.S. Department of Justice.