FTX founder sentenced to 25 years in prison
Bankman-Fried, crypto exchange boss, was convicted of stealing billions from customers
NEW YORK — 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 40-50 years 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 6 1/2 years requested by his defense lawyers.
Bankman-fried, 32, did not visibly react as the sentence was handed down by Judge Lewis A. Kaplan at US District Court in Manhattan.'' His parents, 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 Bankmanfried’s actions.
before the sentence was delivered, Bankman-Fried, clean shaven 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.
‘A lot of people feel really let down, and they were very let down. I’m sorry about that. I’m sorry about what happened at every stage.’
SAM BANKMAN-FRIED, the founder of FTX, before his sentencing
“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, n.Y., 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, he was convicted of seven counts of fraud, conspiracy, and money laundering.
His sentence ranks as one of the longest imposed on a whitecollar 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 at the time and died 12 years later. Elizabeth Holmes, who was convicted of defrauding investors in her blood-testing startup, 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.”
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 easyto-use platform where investors could exchange dollars or euros for digital coins such as bitcoin and ether. Its valuation was north of $30 billion.
But over less than a 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 startups.
After he was convicted, Bankman-Fried’s lawyers and family embarked on a long-shot campaign to secure a lenient sentence and rewrite the public narrative about FTX’s failure. In a sentencing memo, marc mukasey, one of the defense lawyers, argued that Bankman-Fried had sometimes behaved strangely on the stand because he was autistic. He also cited the mogul’s charitable initiatives, arguing that FTX was supposed to be a force for good in the world.
But the defense’s case centered on the money that FTX users lost when the exchange went under. Since FTX’s bankruptcy, its new leaders have cobbled together billions of dollars to return to customers, partly by liquidating stashes of digital coins and selling Bankman-Fried’s stakes in other companies. mukasey claimed those customers would eventually be made whole through the bankruptcy process, putting the losses caused by Bankman-Fried’s actions at “zero.”
The prosecutors rejected that argument. while FTX’s new leadership has predicted that customers will eventually get their deposits back, the money they receive will be equivalent to the dollar value of their holdings in november 2022 — and won’t account for a recent surge in the crypto markets that sent bitcoin to its highest-ever price.
Bankman-Fried “demonstrated a brazen disrespect for the rule of law,” prosecutors wrote in a sentencing memo. “He knew what society deemed illegal and unethical, but disregarded that based on a pernicious megalomania.”
On Thursday, kaplan said of FTX’s victims: “The defendant’s assurance that they will be paid in full is misleading. It is logically flawed. It is speculative.”
Bankman-Fried has vowed to appeal his conviction, hiring a lawyer from the law firm Shapiro Arato Bach to oversee that effort.
‘He regrets that he made a very bad bet about the likelihood of getting caught.’
JUDGE LEWIS A. KAPLAN, of US District Court in Manhattan, about Sam Bankman-Fried