Meme Coins Surge and Crash Amid Controversy: Former FTX CEO’s 25-Year Prison Sentence Sparks Cryptocurrency Community Backlash
Crypto News – In the wake of a U.S. court’s decision to sentence Sam Bankman-Fried, the former CEO of FTX, to over two decades in prison, the world of meme coins witnessed a tumultuous rollercoaster ride.
On March 28, Judge Lewis Kaplan delivered a historic verdict, imposing a 25-year jail term on Bankman-Fried for seven counts of fraud. This marked a significant moment as he became the first individual from FTX to face imprisonment in connection to the exchange’s collapse in November 2022, an event that reverberated as one of the most monumental corporate failures in U.S. history.
Prior to the sentencing, a developer introduced a meme coin named “Sam Baseman Fraud,” amusingly utilizing the ticker “FTX,” on the Coinbase layer-2 network Base. Within a mere seven hours, this FTX-themed meme coin surged an astonishing 23,300%, reaching a pinnacle market capitalization of $1.5 million, according to DexScreener data.
As often observed with meme coins, the euphoria was short-lived, and the token experienced a rapid sell-off, plummeting by more than 85% within a span of three hours. Currently, the meme coin’s value has stabilized around $0.06, marking a substantial 60% decline from its peak.
Shortly following Bankman-Fried’s sentencing, another meme coin, “Som Bonkmon Fraud,” themed around SBF, emerged on Solana. Initially, this Solana-based SBF meme coin soared to a market capitalization of approximately $20 million, representing an impressive rally of over 18,000% from its launch value of $30,000. However, it faced a steep decline, plunging by over 95% from its peak. As of the latest update, it trades around $0.0008, slightly above its initial listing price.
These Bankman-Fried-themed meme coins join a plethora of others inspired by crypto and political figures, such as Dog Wif Hat (WIF) on Solana, Pepe on Ethereum, and Coq Inu (COQ) on Avalanche.
The resurgence of meme coins gained momentum following the remarkable ascent of Dog Wif Hat (WIF), which surged from a market cap of around $50,000 to an astounding $3.5 billion in just four months.
While meme coins offer hyper-speculative investment opportunities, often lacking utility or fundamental valuation beyond topical interest and hype, their influence remains profound within the crypto space. Notably, the native cryptocurrency of the now-defunct FTX exchange, FTX Token (FTT), also experienced a significant decline of more than 16% upon news of Bankman-Fried’s sentencing, as per CoinGecko data.
Prominent Crypto Figure Sam Bankman-Fried Receives 25-Year Prison Sentence for Conspiracy and Fraud, Sparking Community Outcry and Comparisons to High-Profile Cases
The sentencing of Sam Bankman-Fried, once a prominent figure in the cryptocurrency sphere, has sent shockwaves through the community as he received a 25-year prison term from a federal judge on seven charges of conspiracy and fraud.
As the verdict was delivered, reactions flooded in from various quarters, with crypto Twitter being particularly fervent. Known for its swift expression of opinions, the community has offered a blend of outrage, comparisons, and speculation in response to the sentencing.
Insufficient Punishment
A significant portion of the community feels that the sentence given to Bankman-Fried is inadequate considering the seriousness of his crimes.
John E. Deaton, an attorney and pro-crypto U.S. Senate candidate from Massachusetts, drawing on his dual perspectives as a criminal defense lawyer and former federal prosecutor, firmly stated, “In my opinion, SBF should’ve received twice that sentence. If you engage in fraud and steal the life savings of hard-working people, you deserve a harsher punishment.”
This sentiment of perceived leniency in the sentencing was echoed by Dan Held, a general partner at investment firm Asymetric, who criticized the 25-year term as “Nowhere near long enough given his actions, attitudes towards his actions, and the actual harm caused.”
Bordois, the head of content and marketing at Flamingo Finance DeFi, similarly commented, “[25 years for SBF Sam Bankman-Fried isn’t enough] (But it’s true.)”
Comparative Analysis
SBF’s sentencing has naturally led to comparisons with other high-profile convictions and sentences. Some drew parallels to Bernie Madoff, whose $65 billion Ponzi scheme surpasses that of Bankman-Fried. Madoff pleaded guilty in 2009 and was sentenced to 150 years in prison. He passed away in prison in 2021.
Spencerswanson.eth, a ventures associate at Plug and Play Tech Center, explicitly called for a more proportionate sentence, suggesting that Bankman-Fried deserved a sentence more in line with Madoff’s life imprisonment: “#SBF receives 25 years in prison, not long enough in my opinion. He’ll be out on parole in a decade… I was hoping for the Bernie Madoff life sentence.”
(Note: There is no parole in the federal system where Bankman-Fried will serve, so the maximum reduction he could receive from his 25-year sentence would be 15% for good behavior).
However, no sentencing disparity drew more attention than that between SBF and Ross Ulbricht, the founder of Silk Road, who remains a cause célèbre among crypto enthusiasts. Ulbricht was convicted in 2015 for various charges including conspiracy to commit money laundering and narcotics conspiracy, receiving a sentence of double life imprisonment plus 40 years without the possibility of parole.
Jake Chervinsky, chief legal officer at the Variant Fund, reflected on this comparison: “If you’re following all the news about SBF today, take one moment to reflect on Ross Ulbricht. SBF got 25 years… @RealRossU got two life sentences, plus 40 years. This is not justice.”
The disparity in the severity of Ulbricht’s sentence compared to Bankman-Fried’s has led many, including Girl Gone Crypto, host of the weekly Crypto Minute show, to question the inconsistency: “Can someone please explain to me how Ross Ulbricht got a double life + 40 sentence and SBF only got 25 years?”
Concerns About Future Behavior
A prevailing concern among observers was the potential for Bankman-Fried to resume criminal activities upon release. Judge Lewis Kaplan’s remarks, highlighting Bankman-Fried’s calculated approach and apparent lack of remorse, resonated with the community’s anxieties.
Independent crypto investor DCinvestor cautioned, “ok, one last thing on SBF: when he gets out in 25 years (or maybe half that) there will still be a critical mass of people here welcoming him back like he’s a hero and buying whatever he is selling next… sad, but true.”
Popular crypto commentator and podcast host Scott Melker, known as The Wolf Of All Streets, playfully speculated on Bankman-Fried’s potential future involvement in emerging technologies, stating, “SBF is going to come out of prison firing on all cylinders in Web5 on Layer 7s.”
Jameson Lopp, co-founder of self-custody provider Casa, took a more satirical approach, imagining a scenario where “SBF has been released from prison… Bitcoin is trading for over $100,000,000… SBF finds a few coins in his couch cushions and uses them to self-fund his campaign for President of the United States.”
Perhaps no one, however, summarized the sentiment as eloquently as Gaslite cofounder PopPunkOnChain—using Sam’s own words, no less.
Whatever SBF decides to do next, one thing is certain—he has plenty of time to think about it.
%s Comment