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Bankman-Fried Is Sentenced to 25 Years in Prison Over FTX Collapse

Bankman-Fried Is Sentenced to 25 Years in Prison Over FTX Collapse
Sam Bankman-Fried (Photo: Yuki Iwamura/Bloomberg)

FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison for stealing billions of dollars from customers, marking the final chapter in a case that has both captivated and overshadowed the crypto industry. 

US District Judge Lewis A. Kaplan delivered the sentence in federal court in Manhattan moments after Bankman-Fried said he was “sorry about what happened at every stage.” He faced as long as 110 years behind bars after being convicted last year of seven offenses, including fraud and conspiracy.

The one-time billionaire became a symbol of malfeasance and greed in the crypto world after his hugely popular FTX exchange collapsed, exposing a yearslong fraud that swindled about $10 billion from customers. Bankman-Fried, 32, had denied knowingly committing fraud and claimed he and his crypto empire were victims of market downturns in 2022.

Prosecutors had sought a sentence of as much as 50 years while Bankman-Fried’s lawyers had recommended just 6 1/2 years. While there is no parole in the federal system, he could be released a few years early for good behavior.

Kaplan dismissed Bankman-Fried’s 20-minute statement, saying he wasn’t truly remorseful and focused instead on the severity of the crime.

“There is a risk that this man will be in a position to do something very bad in the future,” Kaplan said. “And it’s not a trivial risk. Not a trivial risk at all.”

In addition to the prison sentence, Kaplan said that Bankman-Fried should forfeit more than $11 billion. The judge said he would recommend that he is incarcerated at a facility near his parent’s home in California.

While Bankman-Fried has already signaled his intention to appeal his conviction, he also has a right to challenge the sentence.

At trial, prosecutors said Bankman-Fried siphoned billions of dollars from FTX to its sister hedge fund, Alameda Research, to spend on speculative investments, more than 300 political donations and expensive real estate.

Faced with market volatility, lenders began asking for their money in 2022 and Bankman-Fried used FTX customer funds to pay them back. But a rush of customer withdrawals culminated in FTX filing for bankruptcy in November 2022, and Bankman-Fried stepping down as chief executive officer.

You can't always get what you want | What notable white-collar defendants requested at sentencing compared with the initial prison term issued by trial judge.

Before sentencing, Bankman-Fried’s lawyer gave an impassioned appeal for a light sentence. Marc Mukasey praised his client’s dedication to helping others, citing the funds he raised for charity as well as the time in jail he has used to help other inmates study for the general education degrees.

“Sam is an incredibly kind hearted and generous person who may not always demonstrate all the social norms but is giving and selfless beyond most norms,” Mukasey said in a hushed courtroom.

“Sam Bankman-Fried doesn’t make decisions with malice in his heart; he makes decisions with math in his head,” he said.

But the judge and prosecutors didn’t buy the portrayal of Bankman-Fried as a socially awkward do-gooder.

“This was a business that was pervaded with criminality throughout,” assistant US Attorney Nick Roos said. “While the line sounds good, it’s troubling because what it says is if Mr. Bankman-Fried thought the mathematics would justify it he’d do it again.”

During his statement, Bankman-Fried tried to pin some of the delay in customers’ being paid back on the administrators of the company after it filed for bankruptcy. He said that there were enough funds available to return their funds much more quickly.

“Mostly customers have been failed,” he said. “They’ve been failed by more people than I can count not least of which myself. It’s been excruciating to watch all of this unfold.”

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