Five months following being convicted of one of the biggest white collar crimes in history, Sam Bankman-Fried, the former crypto tycoon and founder and CEO of the FTX exchange, was sentenced today (Thursday) by a US court to 25 years in prison.
Bankman-Fried – who was also known by the nickname SBF, and was even crowned in the past with the title “Crypto King” – was convicted in November of seven charges, including wire fraud, money laundering and conspiracy, following a month-long trial that exposed the arrogance and risk-taking in the industry The crypto.
“He knew it wasn’t right,” Judge Louis Kaplan said today of Bankman-Fried when handing down the sentence. “He knew it was criminal. He regrets making a very bad bet on the probability of getting caught. But he’s not going to admit it, and that’s his right.”
Judge Kaplan noted that Bankman-Fried’s crimes cost his victims $550 million, and that in total, FTX’s clients lost $8 billion, and its investors lost $1.7 billion. Also, the lenders of the Alameda Research hedge fund founded by Bankman-Fried lost $1.3 billion.
The judge also said the 32-year-old Bankman-Fried lied during his trial testimony when he claimed he was unaware that his hedge fund had spent client deposit money taken from FTX.
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Barbara Freed and Alan Joseph Bankman, the parents of FTX founder Sam Bankman-Freed, arrive in court in New York today Photo: Yuki Iwamura/Bloomberg
Barbara Freed and Alan Joseph Bankman, the parents of FTX founder Sam Bankman-Freed, arrive in court in New York today Photo: Yuki Iwamura/Bloomberg
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Judge Kaplan added that Bankman-Fried’s claim that FTX customers will get their money back “is misleading, logically flawed and speculative.” The judge further explained: “A thief who takes his loot to Las Vegas and bets successfully on the stolen money is not entitled to a reduced sentence for using the money he earned to pay back what he stole.”
Bankman-Fried, wearing a short prison uniform shirt, stood with folded hands as the sentence was read by the judge.
The federal prosecutors asked the court to impose on Bankman-Fried a sentence of 40-50 years in prison, while his lawyers sided with a sentence of regarding five years in prison.
“My useful life is probably over”
Before handing down the sentence, Bankman-Fried said today: “I’m sorry.” To date, Bankman-Fried has expressed very little remorse for his part in the events at FTX. He claimed throughout the trial that he did not commit fraud. However, in court today he admitted that he made “a series of bad decisions” which “haunt me every day”.
“A lot of people feel very disappointed, and indeed they were very disappointed, and I’m sorry for that. I’m sorry for what happened at every step,” he said. “My useful life is probably over.”
The former billionaire also apologized to his colleagues at the FTX exchange. “They put a lot of themselves into it, and I threw it all away.” Bankman-Fried announced even earlier his intention to appeal his conviction and sentence.
Bankman-Fried became a symbol of the corruption of the crypto world last year, when FTX collapsed and he was accused of stealing billions of dollars from his clients. He financed donations to politicians, venture capital investments and an extravagant lifestyle with the stolen money.
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Sam Bankman-Fried leaves the court in New York in February 2023 Photo: Stephanie Keith/Bloomberg
Sam Bankman-Fried leaves the court in New York in February 2023 Photo: Stephanie Keith/Bloomberg
This was a very dramatic drop from the year before, when FTX and Bankman-Fried seemed to be riding a wave of success – with a Super Bowl commercial and celebrity endorsements like quarterback Tom Brady and comedian Larry David.
A jury determined in November that Bankman-Fried illegally used FTX client funds to cover his expenses, which included the purchase of luxury properties in the Caribbean, the purchase of two private jets and alleged bribes to Chinese officials.
“The defendant harmed tens of thousands of people and companies across several continents, over a period of many years. He stole money from clients who entrusted it to him, lied to investors, sent fabricated documents to lenders, poured millions of dollars in illegal contributions into our political system and bribed foreign officials. Each of the crimes These deserve a long sentence,” the prosecutors told Judge Kaplan when the charges were filed.
Bankman-Fried’s lawyers, friends and family members asked for lenient treatment for him, saying that there is no chance that he will repeat his crimes. They also say most of FTX’s investors got their money back — a claim disputed by bankruptcy attorneys, FTX’s new management and its creditors.
“Bankman-Fried continues to live in an illusion,” wrote John Ray, who was appointed CEO of FTX to oversee the company’s bankruptcy proceedings. Ray, who was in charge of dismantling the energy giant Enron – until recently the biggest fraud of the 21st century – and 40 other frauds and liquidations, opened the report submitted to the court with these words: “In my entire career, I have never seen such a complete failure of corporate control and a complete absence of reliable financial information.”
Two weeks ago, Bankman-Fried’s lawyer, Mark Mokasey, attacked the Probation Service’s recommendation to sentence his client to 100 years in prison, saying a sentence of that length would be “grotesque” and “barbaric.” He urged the judge to sentence his client to five to six and a half years in prison.
“Sam is not some ‘evil genius’ as he is portrayed in the media, or the greedy scoundrel portrayed in the trial,” said Mokasey.
