The new CEO of collapsed cryptocurrency exchange FTX, who is also a specialist in bankruptcy restructuring, has criticized the exchange's founder and former CEO Sam Bankman-Fried following the latter's assertion that there was "zero" harm to investors, lenders, and customers who put their faith in SBF's crypto vision.
In his victim impact statement filed Wednesday and written "on behalf of FTX and its millions of creditor-victims to correct material misstatements and omissions in the sentencing submission made to this Court by Mr. Bankman-Fried," John J. Ray III reiterated that there was immense harm on victims of the former crypto darling's actions as the FTX leader.
"The harm was vast. The remorse is nonexistent. Effective altruism, at least as lived by Samuel Bankman-Fried, was a lie," he wrote. Ray III also rebutted SBF's sentencing defense that FTX was already solvent at the time the exchange filed for bankruptcy, saying the statements were all "categorically, callously, and demonstrably false."
He pointed out that even if there was potential for victims to recover some of the funds they lost when the exchange spectacularly collapsed in 2022, it, by no means, assures that customers will "be in the same position they would have been had they not crossed paths with Mr. Bankman-Fried and his so-called brand of 'altruism.'"
"Mr. Bankman-Fried's victims will never be returned to the same economic position they would have been in today absent his colossal fraud," Ray III added.
In SBF's sentencing memorandum filed late last month, it was stated that "the most reasonable estimate loss is zero," "the money was there – not lost," and "the harm to customers, lenders, and investors is zero."
Bankman-Fried's lawyers asked for a maximum of six-and-a-half-year sentence in the said filing, arguing that their client showed an "immense amount of remorse" in the past six months.
U.S. prosecutors bounced back with a response, urging the court to slap a maximum of 50 years sentence on the convicted crypto magnate, saying it was necessary "to reflect the seriousness of the defendant's crimes." Prosecutor Damian Williams reiterated that SBF "perpetrated one of the biggest financial frauds in American history, a multi-billion-dollar scheme designed to make him the king of crypto."
Bankman-Fried was convicted of seven counts, including money laundering and fraud. He is scheduled for sentencing on March 28.
His crypto empire imploded in November 2022 following an exposé that revealed some FTX funds were committed to risky operations at Alameda Research, the disgraced crypto mogul's hedge fund.
