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Ex-crypto king Sam Bankman-Fried will be sentenced for defrauding FTX investors

DEBBIE ELLIOTT, HOST:

Crypto wunderkind Sam Bankman-Fried enters a Manhattan courtroom today to learn his fate.

LEILA FADEL, HOST:

He, of course, was the mastermind behind the cryptocurrency exchange FTX, and then, a jury found, a criminal mastermind. It all came to a colossal and sudden collapse in late 2022, costing investors billions of dollars. Now, at just 32 years old, he'll be sentenced today to a prison term that could last decades.

ELLIOTT: NPR's Rafael Nam is here to bring us up to speed. Remind us, what was Sam Bankman-Fried found guilty of?

RAFAEL NAM, BYLINE: Basically, fraud. Back in November, he faced seven criminal charges, and he was convicted of all of them. FTX, if you remember, was this huge exchange where people kept their money to trade cryptocurrencies. And Bankman-Fried was found guilty of stealing their money - at least $8 billion.

ELLIOTT: Eight billion - that's billion with a B.

NAM: Yeah, it's a lot of money. And he used the money to finance a lavish lifestyle. Keep in mind he created this company when he was in his 20s. He was surrounded by 20-something-year-olds. He was in the Bahamas. That's where FTX was based. And he was the golden boy of crypto. He was the guy who made crypto cool. He built FTX into the biggest crypto exchange in the world. He had this big hair. He flew in private jets. He knew celebrities. He financed sports, politics - you name it. Tom Brady was a promoter of FTX. So was Steph Curry. And he was seen as the next big thing in finance. And now he could face years in prison.

ELLIOTT: Years in prison. How many years are you talking about?

NAM: So prosecutors want 40 to 50 years. They argue that he committed one of the largest financial frauds of all time. They say he was motivated by greed.

On the other hand, Sam Bankman-Fried's lawyers say he only deserves about five to six years. And that's because they essentially argue that he was just a young guy who was simply in over his head, somebody who just didn't mean to commit fraud. They say he was a bit of a social misfit. He had trouble interacting with others. And he wasn't greedy. He gave some of his money away and wanted to eventually give his fortune away, and that he should be given a second chance in life. And the lawyers also argue that a lot of investors are going to get their money back anyway.

ELLIOTT: Now that seems a bit unusual in a case like this. Investors, you're saying, are likely to get their money back. Would it be all of it?

NAM: Yeah, this is kind of incredible. FTX is now saying they may be able to get all the money back. And keep in mind, after FTX collapsed, a lot of people didn't want anything to do with crypto. Today, however, Bitcoin's back at a record high. And that's important because a lot of FTX holdings were in cryptocurrencies - and other companies' - and it now looks like FTX may be able to sell quite a few of their investments at a big profit. So Bankman-Fried's lawyers argue that the judge should be taking all of this into account.

So the judge in this case has a big decision to make as Bankman-Fried sits in a Brooklyn detention center waiting to hear about his fate. It's this young guy who was once the biggest crypto star going to jail for years or decades. We should find out soon enough.

ELLIOTT: Well, we'll be watching. NPR's Rafael Nam, thanks a lot.

NAM: Thank you, Debbie.

(SOUNDBITE OF THIN THICKET'S "BIG DOG") Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

NPR National Correspondent Debbie Elliott can be heard telling stories from her native South. She covers the latest news and politics, and is attuned to the region's rich culture and history.
Rafael Nam
Rafael Nam is NPR's senior business editor.