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Sam Bankman-Fried sentenced to 25 years over FTX fraud

March 28, 2024

A New York court has handed former cryptocurrency mogul Sam Bankman-Fried a lengthy prison term for fraud and conspiracy. The judge said the 32-year-old had been aware of the criminality of his actions.

FTX founder Sam Bankman-Fried before the bench in a courtroom sketch
Bankman-Fried said he had not sought to mimimize pain to customers in a previous statementImage: Elizabeth Williams/AP Photo/picture alliance

A Manhattan federal court on Thursday sentenced former cryptocurrency billionaire Sam Bankman-Fried to 25 years in prison.

The hearing is the culmination of Bankman-Fried's fall from grace as a wealthy entrepreneur to a convicted felon behind one of the biggest financial frauds in US history.

What the court said

Judges in the sentencing on Thursday said they rejected Bankman-Fried's contention that customers of the now-bankrupt FTX would not actually lose money. 

jury found the 32-year-old guilty in November last year on seven fraud and conspiracy counts stemming from the 2022 collapse of the FTX exchange that he founded.

"He knew it was wrong," US District Judge Lewis Kaplan said of Bankman-Fried before he handed 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."

Kaplan said he intended the sentence to reflect "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."

At the start of a sentencing hearing, Kaplan said that he had found that clients had lost $8 billion (€7.41 billion). He dismissed the notion that customers would be fully paid back through the bankruptcy process.

"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."

Sam was not 'ruthless serial killer,' defense says 

However, the defense has maintained that Bankman-Fried was an "awkward math nerd" and sought to distance him from other notorious corporate fraudsters.

Saml Bankman-Fried
A Massachusetts Institute of Technology graduate, Bankman-Fried rode a boom in digital asset valuesImage: Saul Loeb/AFP

"Sam was not a ruthless financial serial killer who set out every morning to hurt people," defense lawyer Marc Mukasey said. "Sam Bankman-Fried doesn't make decisions with malice in his heart," Mukasey told Kaplan. "He makes decisions with math in his head."

In a 20-minute statement, Bankman-Fried said he did not mean to imply in previous statements that there was no pain to customers.

"Customers have been suffering... I didn't at all mean to minimize that," said Bankman-Fried, who has vowed to appeal both the conviction and sentence.

He faced a statutory maximum of 110 years in prison- although prosecutors had called for a prison sentence of 40 to 50 years.

NYC prosecutor: 'The criminality here is massive in scale' 

"The criminality here is massive in scale, it was pervasive in all aspects of the business," said Nicolas Roos, a prosecutor with the US Attorney's office in Manhattan.

"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 said in a document filed to the court.

A Massachusetts Institute of Technology graduate, Bankman-Fried rode a boom in digital asset values like Bitcoin to a net worth of $26 billion before he turned 30, according to Forbes magazine.

rc/wd (Reuters, AP, AFP)