Sam Bankman-Fried, founder of the now-bankrupt FTX cryptocurrency exchange, was sentenced to 25 years in prison by U.S. District Judge Lewis Kaplan on Thursday. This sentence follows his conviction for stealing $8 billion from FTX customers, marking the end of a dramatic fall from grace for the former billionaire.
In a Manhattan court hearing, Judge Kaplan dismissed Bankman-Fried’s claim that FTX customers did not lose money and accused him of lying during his trial testimony. On November 2, Bankman-Fried, aged 32, was found guilty of seven counts of fraud and conspiracy related to FTX’s collapse in 2022, described by prosecutors as one of the largest financial frauds in U.S. history. Kaplan emphasized Bankman-Fried’s lack of remorse, stating, “He knew it was wrong. He knew it was criminal.”
During the sentencing, Bankman-Fried, dressed in a beige short-sleeve jail t-shirt, acknowledged the suffering of FTX customers and apologized to his former colleagues at FTX. He was led out of the courtroom by U.S. Marshals following the hearing.
The sentence represents a significant shift for Bankman-Fried, who went from being an ultra-wealthy entrepreneur and prominent political donor to a central figure in the U.S. crackdown on cryptocurrency market malfeasance. He has vowed to appeal his conviction and sentence. In determining the sentence, Kaplan found that FTX customers lost $8 billion, FTX’s equity investors lost $1.7 billion, and lenders to Alameda Research, another venture founded by Bankman-Fried, lost $1.3 billion.
Judge Kaplan criticized Bankman-Fried’s assertion that FTX customers and creditors would be fully repaid, describing it as misleading and speculative. He also highlighted that Bankman-Fried lied during his trial testimony about his hedge fund using customer deposits from FTX.
While federal prosecutors had sought a prison sentence of 40 to 50 years, Bankman-Fried’s defense lawyer Marc Mukasey argued for a lesser sentence, citing his client’s efforts to repay customers after FTX’s collapse and describing him as an “awkward math nerd” rather than a malicious actor. A characterization few believe.
Bankman-Fried testified that he made errors, such as failing to implement a risk management team, but denied any intent to defraud or steal from customers. His parents, both Stanford University law professors, were present at the sentencing.
Before his downfall, Bankman-Fried, a Massachusetts Institute of Technology graduate, saw his net worth reach $26 billion. He was known for his commitment to effective altruism and significant contributions to Democratic political causes. However, prosecutors painted a contrasting picture of Bankman-Fried, accusing him of years-long embezzlement of customer funds.
Since August 2023, Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn, following Judge Kaplan’s revocation of his bail due to probable witness tampering.
