Sam Bankman-Fried occupied a unique and privileged role in the cryptocurrency industry. From its inception, the cryptocurrency sector has suffered from a trust deficit due to its price volatility and numerous frauds, hacks and scams. These events kept most retail investors on the sidelines due to a justifiable fear that whatever money they put into the unregulated sector would quickly evaporate.

Enter Bankman-Fried, who positioned FTX as the trusted place to buy and sell cryptocurrency. He did this through a deliberate and well-orchestrated campaign involving celebrity endorsements, naming rights to the Miami Heat arena, frequent media appearances, partnerships with multiple sports leagues and teams, political contributions, courting of federal regulators, and appearances on stage with luminaries such as Bill Clinton and Tony Blair.

It all worked. FTX became one of the fastest growing companies in history, reaching a $32 billion valuation, 1 million users, and $21 billion in average daily trading volume just two years after its founding. No doubt, thousands of FTX customers agreed with NBA superstar Steph Curry when he said in a commercial, “I’m not an expert, and I don’t need to be. With FTX, I have everything I need to buy, sell, and trade crypto safely.”

FTX and Sam Bankman-Fried’s meteoric rise was only possible because more than 1 million people from around the world entrusted FTX with their hard-earned money. When FTX collapsed, these are the people who suffered the most. And yet their stories have largely gone untold, until now.

On Mar. 14, attorneys Adam Moskowitz and David Boies submitted a collection of victim impact statements to Judge Lewis Kaplan ahead of Sam’s sentencing on Mar. 28. Moskowitz and Boies have been working for more than a year in multi-district litigation to recover damages for almost a million of FTX’s former customers.

The impact statements show that Sam’s victims come from all walks of life, but they all shared a belief that investing in cryptocurrency through FTX provided an opportunity to accomplish their financial goals, be it save for retirement, pay for their children’s college education, or purchase a home. These hopes evaporated on Nov. 11, 2022, and they have not returned. 

Bankman-Fried, through his attorneys, continues to insult his former customers. In a sentencing memo submitted to Judge Kaplan last month, Bankman-Fried’s lawyers insist that his was a victimless crime because FTX customers and creditors “are expected to get back all of their money” and that the “harm to customers, lenders, and investors is zero.”

These assertions were based on statements made earlier this year by FTX’s current lawyers in bankruptcy court. But as noted by FTX CEO John Ray in response to Sam’s sentencing memo, such statements are “categorically, callously, and demonstrably false.”

According to Sam’s lawyers, what befell FTX was a classic “run” that resulted in a “temporary shortfall in liquid assets to cover the unprecedented level of customer withdrawal requests beginning on November 6, 2022, which reached $4 billion per day the morning of November 8.”

Most people are aware that runs can and do happen to banks. FTX was not a bank, but an exchange. Customers purchased cryptocurrency through FTX with the expectation that the exchange would serve as a mere custodian of their cryptocurrency balances. In fact, the exchange’s terms of service stated that none of the crypto in customer accounts are “the property of, or shall or may be loaned to, FTX Trading,” and that the platform “does not represent or treat Digital Assets in User’s Accounts as belonging to FTX Trading.”

When customers went to sell their cryptocurrency, FTX should have been able to return it to them. But it could not, because customer funds had been illegally lent to Alameda for speculative investments.

The terms of service are also the reason many FTX customers are upset with the bankruptcy estate’s decision to value their claims as of the petition date. Customers who held one bitcoin on FTX when they collapsed should get one bitcoin back from the estate. Instead, customers are being treated as unsecured creditors, meaning they will receive $16,871 for each bitcoin they held on FTX, which was the price as of Nov. 11, 2022. Considering that bitcoin is currently trading above $66,000, customers will miss out on gains of roughly $49,000, or 290 percent of what they had invested at that time.

The same is true for nearly all the cryptocurrencies customers held on FTX — most of their prices have gone up substantially over the last year. This is money that customers could have used to meet their financial needs and goals, if not for Bankman-Fried’s fraud. So no, this was not a victimless crime.

Thousands of customers will also suffer losses as a result of the bankruptcy estate’s determination that FTT — the FTX exchange token — is akin to an equity interest in the Debtors and should be valued at $0 for voting and distribution purposes, despite a current market capitalization of more than $690 million.

Bankman-Fried deliberately chose not to register FTT as a security with the Securities and Exchange Commission. (The SEC subsequently alleged that FTT is an unregistered security.) Had he done so, FTT purchasers would have been better informed about the risks involved in purchasing FTT, such as the risk that FTT’s value could go to zero if FTX were to go bankrupt. If the bankruptcy estate is successful in its efforts to value FTT at zero, there will be a tangible loss of more than $400 million. So again, this was not a victimless crime.

Many more FTX customers will lose money because of the labyrinthine claims process. Most retail investors have no experience with the bankruptcy process, and some may not even know they are entitled to file a claim. In addition, filing a claim often requires the customer to provide supporting documentation, which they may no longer be able to access. Even Sam’s sentencing memo acknowledges that only customers “who can prove their losses” can get money back.

So even after being found guilty by a jury of his peers, Bankman-Fried continues to shirk responsibility for his actions. The truth, as laid out in the victim impact statements, is that Sam’s former customers have suffered tremendously and will never be made whole. Whatever sentence Bankman-Fried receives on Thursday, he will have earned it.

Lee Reiners is a lecturing fellow at Duke University’s Financial Economics Center.