‘HE KNEW IT WAS WRONG’
Bankman-Fried, convicted former crypto maven, sentenced to 25 years.
Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange who was convicted of stealing billions of dollars from customers, was sentenced to 25 years in prison Thursday, capping an extraordinary saga that upended the crypto industry and became a cautionary tale of greed and hubris.
Bankman-Fried’s sentence was shorter than the 40 to 50 years that federal prosecutors had sought after a jury found him guilty of fraud, conspiracy and money laundering — charges that carried a maximum penalty of 110 years behind bars. But the punishment was far above the six and a half years requested by his defense lawyers.
Bankman-Fried, 32, did not visibly react as Judge Lewis A. Kaplan handed down the sentence in Federal District Court in Manhattan. His parents, the law professors Joe Bankman and Barbara Fried, sat two rows from the front, staring at the floor. “He knew it was wrong. He knew it was criminal,” Kaplan said of Bankman-Fried’s actions.
Before the sentence was delivered, Bankman-Fried, cleanshaven and wearing a loosefitting brown jail uniform, apologized to FTX’s customers, investors and employees.
“A lot of people feel really let down, and they were very let down,” he said. “I’m sorry about that. I’m sorry about what happened at every stage.” He added that his decisions “haunt” him every day.
Bankman-Fried was also ordered to forfeit $11.2 billion in assets.
At the sentencing, Kaplan pointed to testimony from Bankman-Fried’s trial that showed the FTX founder’s extreme appetite for risk, saying it was his “nature” to make colossally dangerous bets. “There is a risk that this man will be in a position to do something very bad in the future,” he said.
Kaplan also said Bankman-Fried had lied on the witness stand and failed to take responsibility for his crimes. “He regrets that he made a very bad bet about the likelihood of getting caught,” he said. “But he’s not going to admit a thing.”
Bankman-Fried, currently housed at the Metropolitan Detention Center in Brooklyn, will be sent to a low- or medium-security prison, the judge said, very likely near his parents’ home in the San Francisco Bay Area.
The sentencing signified the finale of a sweeping fraud case that exposed the rampant volatility and risk-taking across the loosely regulated world of cryptocurrencies. In November 2022, FTX imploded virtually overnight, erasing $8 billion in customer savings. At a trial last fall, Bankman-Fried was convicted of seven counts of fraud, conspiracy and money laundering.
His sentence ranks as one of the longest imposed on a white-collar defendant in recent years. Bernie Madoff, who orchestrated a notorious Ponzi scheme that unraveled during the 2008 financial crisis, received a 150-year sentence in 2009. He was in his 70s and died 12 years later. Elizabeth Holmes, who was convicted of defrauding investors in her blood-testing start-up, Theranos, was sentenced to 11 years and three months in 2022.
A representative for Bankman-Fried declined to comment. In a statement, his parents said, “We are heartbroken and will continue to fight for our son.”
Ira Lee Sorkin, the defense lawyer who represented Madoff, said he was not surprised Bankman-Fried got a stiff sentence, albeit a shorter one than his own client.
“He is 32 years old, and he will see the light of day,” he said of Bankman-Fried. “But he is going to spend a lot of time in a cell.”
Just 18 months ago, Bankman-Fried was a corporate titan and one of the youngest billionaires on the planet. With his face plastered on billboards and magazine covers, he could raise money seemingly at will. He hobnobbed with actors, musicians and superstar athletes, cultivating an image as a nerdy do-gooder who intended to donate all his wealth to charity.
Based in the Bahamas, FTX was one of the largest marketplaces for cryptocurrencies — an easy-to-use platform where investors could exchange dollars or euros for digital coins like Bitcoin and Ether. Its valuation was north of $30 billion.
But over less than week in November 2022, a run on deposits exposed an $8 billion hole in FTX’s accounts. Bankman-Fried resigned, handing over power to a team of lawyers who promptly filed for bankruptcy. The next month, he was arrested at his luxury apartment in the Bahamas and charged with stealing from customers to finance billions in political contributions, charitable donations and investments in other start-ups.