Crypto tycoon jailed for 25 years over $8bn fraud
A US entrepreneur who stole billions of dollars from customers was sentenced to 25 years in jail yesterday over the collapse of FTX, once one of the world’s most popular platforms for trading digital currency.
Sam Bankman-Fried, 32, was convicted in November of fraud and conspiracy after a jury found that he looted an estimated $8bn from FTX depositors to cover his expenses, which included buying luxury properties in the Caribbean, private planes and alleged bribes to Chinese officials.
Prosecutors had asked the judge to jail Bankman Fried for 40 to 50 years, arguing that the public needs protecting from him and a harsh sentence would deter other criminals.
He appeared in Manhattan federal court for sentencing over what prosecutors called one of the biggest financial frauds in US history.
Addressing the court, Bankman-Fried apologised to the people that he “really let down”.
“They were very let down, and I am sorry about that.” he said. “I am sorry about what happened at every stage. And there are things I should’ve done and things I shouldn’t have.”
He also apologised to his former colleagues at FTX, including co-founder Gary Wang and his exgirlfriend Caroline Ellison, both of whom testified against him in compliance with their plea agreements.
“They put a lot of themselves into it, and I threw that all away,” he added. “It haunts me every day.”
One of FTX’s backers, the BritishIndian investor Sunil Kavuri, lost $2.1m (£1.7m) when the firm collapsed. He spoke at the sentencing hearing on behalf of 200 victims.
“I suffered every day,” he told the court, adding that he wanted to spend the money he lost on a family home and his children’s education.
Judge Lewis Kaplan said that Bankman-Fried lied on the witness stand at his trial when he said he did not know that his hedge fund, Alameda Research, had spent customer deposits taken from FTX.
Lenders to Alameda Research lost $1.3bn in the fraud. The judge described Bankman-Fried’s claim that victims would be paid back in full as “misleading and logically flawed”.
“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,” Judge Kaplan said.