AMID Binance crisis in Nigeria, FTX founder, Mr Sam Bankman-Fried, was sentenced to 25 years in jail on Thursday, March 28, by a United States court judge for stealing $8 billion from customers in one of the biggest frauds in the US history.
US District Judge, Mr Lewis Kaplan, gave the sentence at a Manhattan court hearing, accusing the 32-year-old of lying during his trial and deliberately defrauding customers of their hard-earned money.
The judge rejected “the entirety of defendant’s argument there was no loss at FTX,” stating that the claim was “misleading, logically flawed and speculative.”
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The FTX founder faced seven fraud and conspiracy counts in relation to the FTX’s 2022 collapse, which involved billions of dollars from customers across the world.
Mr Bankman-Fried had expressed apology to his customers and former colleagues at FTX for letting them down, but insisted that customers’ money was still intact. He had however been challenged by Manhattan Attorney, Mr Damian Williams, who told the court that he was a pathological liar.
“His deliberate and ongoing lies demonstrated a brazen disregard for his customers’ expectations and disrespect for the rule of law, all so that he could secretly use his customers’ money to expand his own power and influence,” the attorney had said, as reported by CNBC.
Mr Bankman-Fried had been arrested in Bahamas on December 12, 2022, after declaring bankruptcy. He was extradited to the United States to face trial.
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According to prosecutors, the young cryptocurrency chief used $100 million in stolen funds of FTX customers to support some Democratic candidates in the 2022 US midterm elections. Though $7.3 billion out of $8 billion given as donations to politicians was recovered, the US law deems such action as criminal as its recovery “is not a defense for fraud.”
He was also alleged to have transferred $40 million in cryptocurrency to Chinese government officials to influence them to unfreeze accounts of a related firm, Alameda Research.
Binance facing authorities in Nigeria
Due to alleged foreign exchange market manipulations, Binance executives were arrested and detained in mid-March on the orders of the National Security Adviser (NSA) and the Economic and Financial Crimes Commission (EFCC). Binance is a cryptocurrency firm headquartered in Malta.
However, Regional Manager for Binance in Africa, Mr Nadeem Anjarwalla, escaped with a smuggled passport, according to the NSA.
Head, Strategic Communication, Office of the National Security Adviser (ONSA), Mr Zakari Mijinyawa, said the personnel responsible for the custody of the suspect had been arrested, noting that “a thorough investigation is ongoing to unravel the circumstances that led to his escape from lawful detention.”
Nadeem Anjarwalla, escaped Binance executive
“Recall that the Federal Government of Nigeria, like other governments around the world, has been investigating money laundering and terrorism financing transactions perpetrated on the Binance currency exchange platform.
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“Until his escape, Nadeem Anjarwalla, who holds British and Kenyan nationalities and serving as Binance’s Africa regional manager, was being tried by Nigerian courts. The suspect escaped while under a 14-day remand order by a court in Nigeria. He was scheduled to appear before the court again on 4 April 2024” the statement had noted.
Binance executive sues NSA, EFCC
In a twist, one of the detained Binance employees, Mr Tigran Gambaryan, filed a lawsuit against the EFCC and the NSA on Thursday, March 28, arguing that the seizure of his travel documents and his detention violated Section 35 (1) and (4) of the 1999 Constitution.
Mr Gambaryan is seeking the release of his travel documents and wants the court to stop the respondents — EFCC and NSA — from detaining him with regard to any investigation involving Binance, court documents show.
Mr Gambaryan said he was in Nigeria alongside fleeing Nadeem Anjarwalla to honour the invitation of the NSA and EFCC to deliberate on issues relating to Binance in Nigeria, noting that he did not commit any offence during the meeting and was not informed in writing of any offence he committed in Nigeria at any other time.
Issues facing cryptocurrencies
Cryptocurrencies are digital or virtual currencies underpinned by cryptographic systems, and they enable secure online payments without the use of third-party intermediaries, Investopedia, an investment dictionary, says. Most cryptocurrencies use blockchain technology and are nearly impossible to counterfeit.
However, they are not legal tenders in several jurisdictions as their “pseudonymity allows for criminal uses,” according to Investopedia. Their prices are volatile and they have some associated security risks.
However, it is easier to transfer funds via cryptocurrency channels and can be used to generate good returns.
“The risks are high and so is the price volatility,” says a Lagos-based cryptocurrency trader, Ms Sandra Ihembosi.
“For now, it is a side hustle for me as I do not see myself committing all my time and resources to it,” Ms Ihembosi, who said he had “suffered losses,” noted.
