FTX founder Sam Bankman-Fried was sentenced by a judge on Thursday to 25 years in prison for stealing $8 billion from customers of the now-defunct FTX cryptocurrency exchange he founded, the final step in the dramatic downfall of the former billionaire wunderkind.
The decision came after U.S. District Judge Lewis Kaplan rejected Bankman-Fried's claims during a Manhattan court hearing that FTX clients didn't actually lose money and accused him of lying during trial testimony. judgment. A jury found Bankman-Fried, 32, guilty on November 2 of seven counts of fraud and conspiracy stemming from FTX's collapse in 2022, which prosecutors called the largest in U.S. history. One of the financial fraud cases.
Kaplan said Bankman-Fried has shown no remorse.
"He knows it's wrong," Kaplan said of Bankman-Fried before sentencing. "He knows it's a crime. He regrets that he took a very bad gamble on the possibility of getting caught. But he won't admit to anything, which is his right."
Bankman-Fried stood with her hands clasped as Kaplan read the words. After the hearing, he was led out of the courtroom by members of the U.S. Marshals Service.
In a 20-minute speech to the judge, Bankman-Fried, who was wearing a beige short-sleeved prison T-shirt, acknowledged the losses suffered by FTX clients and apologized to his former FTX colleagues.
The sentence marked Bankman-Fried’s fall from status as an ultra-wealthy entrepreneur and major political donor to the top of America’s biggest list yet of crackdowns on cryptocurrency market malfeasance. Bankman-Fried has vowed to appeal his conviction and sentence.
Kaplan said he found that FTX clients lost $8 billion, FTX equity investors lost $1.7 billion, and lenders to the Alameda Research hedge fund founded by Bankman-Fried lost $1.3 billion.
“Defendants’ assertions that FTX customers and creditors will be paid in full are misleading, logically flawed, and speculative,” Kaplan said. “If the thief brought the stolen goods to Las Vegas and successfully Betting with stolen money is not entitled to a sentence discount by using his Las Vegas winnings to repay what he stole.”
The judge also said Bankman-Fried lied during his testimony at the trial when he said he did not know his hedge fund had spent client deposits withdrawn from FTX.
Federal prosecutors sought a sentence of 40 to 50 years in prison. Bankman-Fried's defense attorney, Marc Mukasey, argued that a sentence of less than 5 1/2 years would be appropriate.
Bankman-Fried told the judge: "Customers have been suffering... I did not intend to downplay that at all. I also think that was missing from what I said throughout this process, and I am Sorry for this.”
Bankman-Fried told the judge of his FTX colleagues, "They put in a lot of effort and I threw it all away. It bothers me every day."
Three of his former close associates testified as prosecution witnesses at the trial that he directed them to use FTX client funds to cover losses to Alameda Research.
'Huge scale'
"The scale of the criminal activity here is massive and pervasive in every aspect of this industry," Nicolas Roos, a prosecutor with the U.S. Attorney's Office in Manhattan, told the judge.
During the hearing, Mukasey sought to distance his client from notorious fraudsters like Bernie Madoff.
"Sam is not a heartless financial serial killer who starts hurting people every morning," said Mukasey, who described his client as a "clumsy math nerd" who struggled to get clients' money back after FTX collapsed.
"Sam Bankman Fried doesn't make decisions with bad intentions," Mukasey added. "He makes decisions with the math in his head."
Bankman-Fried testified in his own defense that he made mistakes, such as not putting together a risk management team, but denied that he intended to defraud anyone or steal clients' money.
His parents, Stanford University law professors Joseph Bankman and Barbara Fried, attended the sentencing.
Bankman-Fried, an MIT graduate, amassed a net worth of $26 billion before he turned 30, according to Forbes magazine, driven by the surging value of Bitcoin and other digital assets.
Bankman-Fried is known for her tousled curly hair and commitment to the Effective Altruism movement, which encourages talented young people to focus on making money and donating it to worthy causes. He is also one of the largest contributors to Democratic candidates and political causes ahead of the 2022 U.S. midterm elections.
But prosecutors said the responsible image he cultivated masked years of misappropriation of client funds.
Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn since August 2023, when Kaplan revoked his bail after finding he may have tampered with witnesses on at least two occasions.
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