FTX founder given 25 years in prison for crypto fraud
CRYPTO entrepreneur Sam Bankman-Fried was sentenced to 25 years in prison on Thursday for a billion-dollar fraud that unravelled with the collapse of FTX, once one of the world’s most popular platforms for exchanging digital currency.
Bankman-Fried, 32, was convicted in November of fraud and conspiracy – a dramatic fall from a year earlier when he and his companies seemed to be riding a crest of success that resulted in a Super Bowl advertisement and celebrity endorsements from stars like Tom Brady and comedian Larry David.
US District Judge Lewis A Kaplan imposed the sentence in the same Manhattan courtroom where, four months ago, Bankman-Fried testified that his intention had been to revolutionise the emerging cryptocurrency market with his innovative and altruistic ideas, not to steal.
Mr Kaplan said the sentence reflected “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”.
He added that it was “for the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”
Mr Kaplan further ordered Bankman-Fried to forfeit more than 11 billion (£8.7 billion).
He also said he would advise the Federal Bureau of Prisons to send him to a medium-security prison or less near the San Francisco area because he is unlikely to be a physical threat to other inmates or prison staff, and his autism and social awkwardness would make him vulnerable to other inmates in a high-security location.
Prosecutors had recommended a prison sentence of 40 to 50 years.
They said: “The defendant victimised tens of thousands of people and companies, across several continents, over a period of multiple years.
“He stole money from customers who entrusted it to him, he lied to investors, he sent fabricated documents to lenders, he pumped millions of dollars in illegal donations into our political system and he bribed foreign officials.
“Each of these crimes is worthy of a lengthy sentence.”
Mr Kaplan agreed with prosecuors that Bankman-Fried should not get leniency just because some investors and customers might get some of their lost money back.
He called the argument “logically flawed” and “speculative”.
He said customers lost about 8 billion dollars (£6.3 billion), investors lost 1.7 billion dollars (£1.3 billion) and lenders were shorted by 1.3 billion dollars (£1.02 billion).”