'Bad guy' Bankman-Fried got off lightly, says cryptocurrency expert

"Inveterate crook" Sam Bankman-Fried has got off lightly with a 25-year jail term, says renowned cryptocurrency author and journalist David Gerard. Former billionaire wonderkid Bankman-Fried, 32, was jailed on Thursday (March 28) for stealing $8 billion from customers of the now-bankrupt FTX cryptocurrency exchange he founded.

But Gerard, whose 2017 book 'Attack of the 50-foot Blockchain' criticized cryptocurrency for its energy costs and multiple exchange hacks, said the American's sentence was lenient.

He told CGTN Europe: "I'm loath to say that anyone should go to jail but if anyone should, it's Sam Bankman-Fried. This was a light sentence compared to what he could have got - 110 years."

According to Gerard: “Everyone who has ever known him (Bankman-Fried) has always called him a liar who could not be trusted. This is a light sentence in the circumstances. When he gets out he'll be 57 - old enough to still have a life, but hopefully not to do very many more crimes."

U.S. District Judge Lewis Kaplan handed down the sentence at a Manhattan court hearing after rejecting Bankman-Fried's claim that FTX customers did not actually lose money and finding that he lied during his trial testimony. 

A jury had found him guilty in November on seven fraud and conspiracy counts stemming from FTX's 2022 collapse in what prosecutors have called one of the biggest financial frauds in U.S. history.

Dodgy enterprise

"FTX was always a rather dodgy enterprise in a lot of ways," said Gerard. "It was quite clear by May 2022, when the Terra Luna (t​​he world's third largest cryptocurrency ecosystem) crash happened that FTX was broke and basically a hot air balloon. 

"They tried frantically buying up other bankrupt crypto companies to fill the gaping black hole in their books. But six months later, it came out that they'd been broke for six months and were just stealing customers money to plug the hole, but they were stealing it before that as well. This has been going on for years. It was standard operating procedure."

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Beguiling celebrities

Gerard agrees with those who argue that it was Bankman-Fried's charm that helped him cultivate relationships with celebrities and politicians alike, including actors Orlando Bloom and Kate Hudson and former world leaders like Bill Clinton and Tony Blair. 

"He knew how to protect that 'gosh, I'm just the nerdy genius' sort of look. He was a very charming fellow. But conmen are charming. That's actually the job."

Bankman-Fried became known for his mop of unkempt curly hair and commitment to a movement called effective altruism, which encourages talented young people to focus on earning money and giving it away to worthy causes.

He was one of the biggest contributors to Democratic candidates and causes before the 2022 U.S. midterm elections. Judge Kaplan pointed to trial evidence showing Bankman-Fried also donated to Republicans through "straw" donors to hide his involvement.

Gerard is scathing of Bankman-Fried's intentions.  "He destroyed people's lives. At least three people killed themselves over losing everything in FTX. He just stole everyone's money and then he told them it was all in a good cause. It wasn't. It was in the cause of Sam Bankman-Fried….He's a very bad guy."

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