News
Sam Bankman-Fried sentenced to 25 years in prison for his role in the collapse of cryptocurrency exchange FTX
Former cryptocurrency billionaire Sam Bankman-Fried was sentenced Thursday to 25 years behind bars for his role in perpetrating one of the largest financial crimes in U.S. history.
Bankman-Fried, 32, was sentenced in November of seven counts of fraud, conspiracy and money laundering, along with other charges of conspiracy to commit commodities and securities fraud.
Bankman-Fried faced up to 110 years under federal sentencing guidelines, but prosecutors had asked Judge Lewis Kaplan to sentence Bankman-Fried between 40 and 50 years old in prison for what they described as a “historic fraud”. Bankman-Fried’s lawyers had argued for a sentence of no more than six and a half years, saying he was unlikely to reoffend.
At Thursday’s hearing, Kaplan said the 25-year sentence reflects “that there is a risk that this man will be in a position to do something very bad in the future. And it’s not a trivial risk at all.” The judge added that it was “for the purpose of incapacitating him to the extent that this can be done appropriately for a significant period of time”.
Click here to view related media.
click to expand
Damian Williams, United States Attorney for the Southern District of New York, She said that the sentence sends “an important message to others who may be tempted to commit financial crimes: justice will be swift and the consequences will be severe.”
Former FTX CEO Sam Bankman-Fried walks outside Manhattan federal court in New York City, March 30, 2023. Amanda Perobelli/REUTERS
Bankman-Fried’s lawyers argued that their client never intended to defraud clients and that Judge Kaplan should therefore show leniency.
“Sam was not a ruthless financial serial killer who set out to harm people every morning,” defense lawyer Marc Mukasey said, Reuters reported. Mukasey described his client as a “clumsy math nerd” who tried to give them clients’ money back after FTX’s collapse, according to the report.
Although Bankman-Fried is expected to appeal his conviction, former federal prosecutor Andrey Spektor said there is little chance the verdict will be overturned. “There’s nothing anyone can do about it,” Spektor said, adding that while Bankman-Fried could have received an even longer sentence, “I don’t think SBF and his family are celebrating a 25-year term.”
Some legal experts thought Bankman-Fried’s education and professional connections would bring some leniency, while others expected a harsher sentence.
“I guess I was kind of in the middle. I realized right away that this time – and this crime – was different, that the judge would actually hold him accountable for his actions,” said sAnat Alon-Beck, a law professor business at Case Western Reserve University.
Alon-Beck compared Bankman-Fried’s sentence to that of disgraced Silicon Valley entrepreneur Elizabeth Holmes, who is serving an 11.5-year prison sentence for defrauding investors. “In the case of SBF, the penalty was more than double,” Alon-Beck said.
At the sentencing hearing, Bankman-Fried apologized to his former FTX colleagues, Reuters reported. “They put a lot of themselves into it, and I threw it all away. It haunts me every day,” Bankman-Fried told the judge, adding: “I’m sorry. I’m sorry for what happened at every stage. . Things that I should have done and said things I shouldn’t have.”
Sam Bankman-Fried’s parents, Barbara Fried and Joseph Bankman, leave a Manhattan courtroom on March 28, 2024, after the FTX co-founder was sentenced to 25 years in prison for fraud related to the trading platform’s collapse of cryptocurrencies. TIMOTHY A. CLARY/AFP via Getty Images
Bankman-Fried’s conviction last fall followed her sentencing surprising collapse of FTX in 2022, the cryptocurrency trading platform he had co-founded and led as CEO, amid an $8 billion funding shortfall. At trial, he was accused of using depositors’ money to prop up his ailing hedge fund, as well as using the funds to buy luxury properties in the Caribbean and to donate to a variety of causes.
FTX was once the second largest cryptocurrency exchange in the world, allowing users to buy and sell dozens of virtual currencies, while Bankman-Fried’s wealth was estimated at more than $30 billion. Flush with billions of dollars of investor liquidity, Bankman-Fried pulled out a Super Bowl commercial to promote FTX and purchased the naming rights to an arena used by the NBA’s Miami Heat.
But the collapse in cryptocurrency prices in 2022 crippled FTX and ultimately led to its collapse. FTX’s hedge fund affiliate, Alameda Research, had made billions of dollars in cryptocurrency investments that lost value. Prosecutors said Bankman-Fried tried to shore up Alameda’s budget with funds from FTX customers.
Three former FTX associates testified against Bankman-Fried after pleading guilty to related crimes. They included Caroline Ellison, Bankman-Fried’s former romantic partner, who said so he had put pressure on her commit fraud.
—The Associated Press contributed to this report.