Fallen crypto mogul Bankman-Fried sentenced to 25 years for fraud scheme
NEW YORK
Former rypto entrepreneur Sam Bankman-Fried was sentenced Thursday to 25 years in prison for a massive fraud on hundreds of thousands of customers that unraveled with the collapse of FTX, once one of the world’s most popular platforms for exchanging digital currency.
U.S. District Judge Lewis A. Kaplan delivered a blistering analysis of Bankman-Fried and his crimes before announcing a sentence that was half of what prosecutors sought and less than a quarter of the 105 years recommended by the court’s Probation officers.
“There is absolutely no doubt that Mr. BankmanFried’s name right now is pretty much mud around the world,” Kaplan said of the 32-year-old man who once seemed atop the cryptocurrency world before his businesses collapsed in
November 2022, leaving customers, investors and lenders short over $11 billion, which the judge ordered him to forfeit.
Kaplan imposed the sentence in the same Manhattan courtroom where, four months previously, Bankman-Fried testified that he had intended to revolutionize the emerging cryptocurrency market with his innovative and altruistic ideas, not steal. The judge said Bankman-Fried repeatedly committed perjury when he told lies from the witness stand.
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 said he would advise the Federal Bureau of Prisons to send Bankman-Fried to a mediumsecurity prison near San
Francisco because his notoriety, his association with vast wealth, his autism and social awkwardness are likely to make him especially vulnerable at a highsecurity facility.
Assistant U.S. Attorney Nicolas Roos had recommended a prison sentence of 40 to 50 years, saying it was the only way to ensure “the defendant doesn’t do it again.”
“The defendant victimized 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,” prosecutors had said in a court filing.
Prosecutors said Bankman-Fried misappropriated billions of dollars to fuel his quest for influence and dominance in the new industry, and had illegally used money from FTX depositors to cover his expenses, which included purchasing luxury properties in the Caribbean, bribes to Chinese officials and private planes.
Kaplan agreed with prosecutors Thursday that Bankman-Fried should not get leniency just because some investors and customers might get some of their losses back. He noted that customers lost about $8 billion, investors lost
$1.7 billion and lenders were shorted by $1.3 billion.
Given a chance to speak, Bankman-Fried stood and apologized in a rambling statement, saying: “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.”
He added, “My useful life is probably over. It’s been over for a while now, from before my arrest.”
Bankman-Fried’s attorneys, friends and family had urged leniency, saying he was unlikely to re-offend again. They also said FTX’s investors have largely recovered their funds — a claim disputed by bankruptcy lawyers, FTX and its creditors.
“Mr. Bankman-Fried continues to live a life of delusion,” wrote John Ray, the CEO of FTX who has been cleaning up the bankrupt company. “The ‘business’ he left on November 11, 2022 was neither solvent nor safe.”
Two weeks ago, Mukasey attacked a probation office recommendation of 105 years in prison, saying a sentence of that length would be “grotesque” and “barbaric.”
Bankman-Fried was worth billions of dollars on paper as the co-founder and CEO of FTX, which was the second-largest cryptocurrency exchange in the world at one time.