The Victims Speak: Emotional Pleas From FTX Users Flood Judge’s Desk Before Big Sentencing

Last Updated on March 22, 2024

Written by

Efe Bravo

Key Takeaways:

FTX victims shared their financial and emotional hardships in statements for Sam Bankman-Fried’s sentencing, detailing losses and a deep-seated distrust in the financial ecosystem due to FTX’s bankruptcy.
The victims highlighted the discrepancy in compensation based on November 2022 asset values, not considering the potential increase in value, with Bitcoin’s price surge cited as an example.
The DOJ proposed a 40 to 50-year prison term for Bankman-Fried, highlighting the severe impact of his actions, while the defense suggested a lighter sentence of no more than 6.5 years, backed by character references.

The downfall of FTX in 2022 left its creditors grappling with lost financial stability, an emotional burden, and a deep-seated distrust in the financial ecosystem. This sentiment was echoed in numerous victim statements prepared for Sam Bankman-Fried’s legal proceedings, as disclosed by the Department of Justice.

The statements, sourced from a global pool of affected individuals, detail the financial and emotional hardships faced due to FTX’s bankruptcy.

letter to judge from FTX victim — Excerpt from a letter to the judge from an FTX victim. Source: CourtListener

One statement poignantly describes the creditor’s financial plight, highlighting a year without income, compounded by unemployment and the challenges of disability recognition.

Others shared their reliance on FTX for financial security due to unemployment driven by health issues, placing their trust in the exchange based on Bankman-Fried’s assurances and the perceived regulation and safety of U.S.-based crypto exchanges, despite FTX’s main operations being in The Bahamas.

FTX victim letter to judge — A victim of FTX’s bankruptcy sends a letter to the judge. Source: CourtListener

A common grievance among the creditors was the compensation for their losses, which reflects the value of their assets in November 2022, not accounting for the potential increase in value of those assets in the current cryptocurrency market.

For instance, Bitcoin’s value surged from around $16,500 post-bankruptcy to approximately $65,000, highlighting the significant financial discrepancy for the victims.

FTX bankruptcy case victim — An FTX victim shares their experience to the judge. Source: CourtListener

The victim impact statements, some of which followed a template, underscore the tangible loss of asset value over time.

letter to judge — A victim of the FTX collapse expressed their sentiments in a letter. Source: CourtListener

The letters collectively call for a judicial acknowledgment of the extensive impact of Bankman-Fried’s actions and FTX’s failure, advocating for comprehensive victim compensation beyond mere penalization of the perpetrator.

FTX victim letter — An FTX victim appeals to the judge court for justice. Source: CourtListener

In the lead-up to Bankman-Fried’s sentencing, the DOJ has proposed a prison term of 40 to 50 years, reflecting the severity of his fraud and conspiracy convictions.

This recommendation contrasts with the defense’s plea for a significantly lighter sentence of no more than 6.5 years, supported by character references from Bankman-Fried’s family, colleagues, and members of the Effective Altruism community.

As the sentencing date of March 28 approaches, the case continues to unravel, offering a sobering glimpse into the repercussions of the FTX saga on its victims, setting a precedent for the handling of similar cases in the cryptocurrency domain.