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Disgraced crypto mogul sentenced to 25 years in jail over billion-dollar fraud
CRYPTO entrepreneur Sam Bankman-Fried was sentenced to 25 years in prison yesterday for 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 the likes of American football star 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.
Kaplan said the sentence reflected “that there is a risk that this man will be in 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.”
Kaplan agreed with prosecutors 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 (£6.3bn), investors lost $1.7bn (£1.3bn) and lenders were shorted by $1.3bn (£1.02bn).
Kaplan also cited three instances where he concluded that BankmanFried committed perjury during his trial testimony, including when Bankman-Fried testified that he didn’t know until weeks before FTX collapsed that customer funds were being diverted to a hedge fund offshoot of FTX.
Given a chance to speak, Bankman-Fried stood and apologised in a rambling statement.
He said: “A lot of people feel really let down. And they were very let down. And I’m sorry about that. I’m sorry about what happened at every stage.”
Defence lawyer Marc Mukasey said his client was misunderstood.
Mukasey said: “Sam was not a ruthless financial serial killer who set out every morning to hurt people. Sam Bankman-Fried doesn’t make decisions with malice in his heart. He makes decisions with math in his head.”
A jury found that Bankman-Fried illegally used money from FTX depositors to cover his expenses, which included purchasing luxury properties in the Caribbean.