Sam Bankman-Fried, the former millionaire CEO of FTX, was sentenced to 25 years in jail on Thursday for stealing $8 billion from clients. This decision infuriated and disappointed some former FTX customers.

Minutes after the sentence was imposed by a New York judge, a member of an FTX creditors organisation going by the moniker Bruno Dixon posted on the messaging service Telegram, saying, “25 years is a joke.”

Going by Steven, a different member of the same Telegram group, the penalty was described as “laughable for such a serious crime.”

The unexpected collapse of FTX in November 2022 could result in losses for over a million consumers. Considering the current value of cryptocurrencies, the victims claim they are still due around $19 billion.

Last year, a jury in New York convicted Bankman-Fried guilty of robbing unwary clients in order to maintain his hedge fund Alameda Research, purchase opulent homes, and pay for political contributions.

For what they claim to be one of the largest financial scams in American history, the prosecution was asking for a 40–50 year sentence. According to the defence of Bankman-Fried, five years would be reasonable because clients would probably be made whole.

On Thursday, a few victims thought the punishment made sense for a crime involving corporate fraud.

One of the Telegram group admins commented, “White collar guys get treated differently so 25 is probably as good as it was going to get,” and advised members to concentrate on getting their possessions back.

However, some victims negatively contrasted it to the 150 years that infamous fraudster Bernie Madoff received.

Another user of the same Telegram group, which has over 3,000 users claiming a total almost $700 million in claims, stated, “I found 30-40 to be somewhat fair.”

Bankman-Fried did not steal customer money, according to Bankman-Fried’s counsel, but he did neglect risk management. Bankman-Fried has promised to challenge both his sentence and conviction.

Customers expressed the opinion that the 25-year sentence was insufficient to support the plea agreements that prosecutors signed with other high-ranking FTX executives, which spared them from harsh penalties in exchange for testifying. Many predicted that after his promised appeal, Bankman-Fried would serve a substantially shorter sentence.

Former federal prosecutor Mark Bini stated that the judge’s punishment took into consideration the seriousness of the offence as well as the conclusion that Bankman-Fried had lied during the trial.

“While less than the prosecutors’ request for 40-50 years, it is a very significant sentence and sends a message that people convicted of crimes in the crypto space will face serious consequences,” said Bini, who is now a partner at Reed Smith & Associates.

Prosecutors brought FTX customers to testify throughout the trial and provided the court with numerous victim impact statements before to punishment. Many claimed their life had been shattered and they had lost years’ worth of savings.

“I lost my happiness, my will to live, and my ability to get out of bed,” a customer of FTX said, claiming they had a $4 million claim. Redacted names were used.

Last year, Reuters revealed that FTX users have established support groups to assist one another in navigating the challenging process of filing for bankruptcy.

Asset recovery is still ongoing for the administrators running FTX. In January, they declared that they anticipated having $13.7 billion to settle $31.4 billion in valid claims, of which $9.2 billion came from clients.

According to the administrators, consumers will receive payment “in full” but at the cryptocurrency rates of November 2022; hence, they will not profit from the current surge in the value of bitcoin and other tokens. Numerous FTX clients are objecting to that choice.

A decline in cryptocurrency values led to a number of bankruptcies of cryptocurrency companies in 2022, including FTX.

(Adapted from Medium.com)