Crypto king Sam Bankman-Fried locked up for 25 years after multibillion-dollar FTX fraud

Former crypto mogul Sam Bankman-Fried has been sentenced to 25 years in prison for his role in the 2022 collapse of FTX, once one of the world’s most popular platforms for trading digital currency.

Bankman-Fried, 32, was convicted in November of fraud and conspiracy — a dramatic fall from a year earlier when he and his companies seemed to be riding a crest of success that resulted in a Super Bowl advertisement and celebrity endorsements from stars like quarterback Tom Brady and comedian Larry David. Now the FTX CEO has been sentenced for 25 years in prison for masterminding the $8billion (£6.3billion) fraud that led to the collapse of the cryptocurrency exchange.

In addition to his prison sentence, Judge Lewis Kaplan of the Southern District of New York also ordered that he forfeit $11.2 billion to help fund the repayment of victims. He said that Bankman-Fried tampered with witnesses and also committed perjury.

Barbara Fried and Allan Joseph Bankman, parents of FTX Co-Founder Sam Bankman-Fried, arrive at federal court for the sentencing of their son

Just prior to announcing Bankman-Fried’s sentence, Kaplan blasted him as remorseless and evasive, adding that there was a risk that “that this man will be in a position to do something very bad in the future, and it’s not a trivial risk”. Though the former FTX CEO said the word “sorry”, Kaplan noted that there was “never a word of remorse for the commission of terrible crimes”.

Speaking to the court, Bankman-Fried said: “I failed everyone I care about and everything too.”

Kaplan said he would advise the Federal Bureau of Prisons to send him to a medium-security prison or lower near the San Francisco area. His rationale was that Bankman-Fried is unlikely to be a physical threat to inmates or prison staff – while his autism and social awkwardness would make him vulnerable to other inmates in a high-security location.

Bankman-Fried said the pain he caused to customers was ‘excruciating to watch’

A jury found that Bankman-Fried illegally used money from FTX depositors to cover his expenses, which included purchasing luxury properties in the Caribbean, alleged bribes to Chinese officials, and private planes. Prosecutors recommended a prison sentence of 40 to 50 years. Bankman-Fried’s legal team proposed a sentence of between five and six and a half years.

After his lawyer spoke at the sentencing, Bankman-Fried addressed the court directly. He said: “A lot of people feel really let down, and they were very let down, and I am sorry about that. I am sorry about what happened at every stage. And there are things I should’ve done and things I shouldn’t have.”

In this courtroom sketch, Sam Bankman-Fried, far left, stands as the jury foreperson, standing far right, reads the verdict

The FTX CEO told the court that the pain he’s caused customers has been “excruciating to watch”, before seemingly acknowledging being on the cusp of being locked in a jail cell. He said: “My useful life is probably over. It’s been over for a while now.”

Prosecutors told Judge Lewis A. Kaplan in a court filing: “The defendant victimised 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.”

Sam Bankman-Fried was the co-founder and chief executive officer of FTX

Bankman-Fried’s attorneys, friends and family have urged leniency, saying he is unlikely to reoffend again. They also say 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, Bankman-Fried’s attorney Marc Mukasey attacked a probation office recommendation of 100 years in prison, saying a sentence of that length would be “grotesque” and “barbaric”.

He urged the judge to sentence Bankman-Fried to a term of five to six and a half years in prison.

“Sam is not the ‘evil genius’ depicted in the media or the greedy villain described at trial,” Mukasey said, calling his client a “first-time, non-violent offender.”

Sam Bankman-Fried’s parents arrive at court

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.

FTX allowed investors to buy dozens of virtual currencies, from Bitcoin to more obscure ones like Shiba Inu Coin. Flush with billions of dollars of investors’ cash, Bankman-Fried took out a Super Bowl advertisement to promote his business and bought the naming rights to an arena in Miami.

But the collapse of cryptocurrency prices in 2022 took its toll on FTX, and ultimately led to its downfall. FTX’s hedge fund affiliate, known as Alameda Research, had bought billions of dollars of various crypto investments that lost considerable amounts of value in 2022. Bankman-Fried tried to plug the holes in Alameda’s balance sheet with FTX customer funds.

Three other people from Bankman-Fried’s inner circle pleaded guilty to related crimes and testified at his trial.

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