Judge sets prison term for FTX founder
Bankman-Fried gets 25 years for crypto theft
NEW YORK − Sam Bankman-Fried was sentenced to 25 years in prison Thursday for stealing $8 billion from customers of the now-bankrupt FTX cryptocurrency exchange he founded, the last step in the former billionaire wunderkind’s dramatic downfall.
U.S. District Judge Lewis Kaplan handed down the sentence at a Manhattan court hearing after rejecting Bankman-Fried’s claim that FTX customers did not actually lose money and accusing him of lying during his trial testimony. A jury found Bankman-Fried, 32, guilty Nov. 2 on seven fraud and conspiracy counts stemming from FTX’s 2022 collapse in what prosecutors have called one of the biggest financial frauds in U.S. history.
“He knew it was wrong,” Kaplan said before handing down the sentence. “He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right.”
Bankman-Fried acknowledged that FTX customers had suffered, and he offered an apology to his former FTX colleagues.
The sentence marked the culmination of Bankman-Fried’s plunge from an ultra-wealthy entrepreneur and major political donor to the biggest trophy to date in a crackdown by U.S. authorities on malfeasance in cryptocurrency markets. Bankman-Fried has vowed to appeal his conviction and sentence.
Kaplan said he had found that FTX customers lost $8 billion, FTX’s equity investors $1.7 billion, and lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion.
“The defendant’s assertion that FTX customers and creditors will be paid in full is misleading, it is logically flawed, it is speculative,” Kaplan said. “A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back what he stole.”
Kaplan also said Bankman-Fried lied when he said he did not know his hedge fund had spent customer deposits.
Federal prosecutors had sought a sentence of 40 to 50 years. BankmanFried’s lawyer, Marc Mukasey, had argued that a sentence of less than 51⁄4 years would be appropriate.
Addressing the judge, BankmanFried said: “Customers have been suffering . ... I didn’t at all mean to minimize that. I also think that’s something that was missing from what I’ve said over the course of this process, and I’m sorry for that.”
Referring to his FTX colleagues, Bankman-Fried told the judge: “They put a lot of themselves into it, and I threw that all away. It haunts me every day.”
Three of his former associates testified as prosecution witnesses that Bankman-Fried had directed them to use FTX customer money to plug losses at Alameda Research.
Nicolas Roos, a prosecutor with the U.S. attorney’s office in Manhattan, told the judge: “The criminality here is massive in scale. It was pervasive in all aspects of the business.”
During the hearing, Mukasey sought to distance his client from fraudsters such as Bernie Madoff.
“Sam was not a ruthless financial serial killer who set out every morning to hurt people,” Mukasey said, describing his client as an “awkward math nerd” who worked hard to get customers their money back after FTX’s collapse.