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Sam Bankman-Fried Sentenced To 25 Years For FTX Fraud

By Nithya Bose in Business News, posted March 29, 2024

The founder of the defunct FTX cryptocurrency exchange, Sam Bankman-Fried, has been sentenced to 25 years behind bars for committing an $8 billion fraud.

US District Judge Lewis Kaplan delivered the sentence at a Manhattan courtroom.

He dismissed Bankman-Fried’s claims that his customers had not suffered financial losses, chastising him for providing false testimony during his trial.

Bankman was convicted on November 2 for seven counts of fraud and conspiracy related to FTX’s 2022 downfall.

This 32-year-old former billionaire was implicated in one of the most significant financial deceits in American history.

Judge Kaplan said: "He knew it was wrong. 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."

Dressed in a jail-issued beige T-shirt, Bankman-Fried addressed the judge: "Customers have been suffering ... I didn't at all mean to minimize that.

"I also think that's something that was missing from what I've said over the course of this process, and I'm sorry for that."

This sentencing ends Bankman-Fried’s descent from a once immensely wealthy entrepreneur and prominent political donor to the most high-profile figure yet caught in the US crackdown on cryptocurrency market misconduct.

US Attorney General Merrick Garland said: "There are serious consequences for defrauding customers and investors.

"Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice."

Judge Kaplan found that customers lost $8 billion, $1.7 billion by its equity investors, and $1.3 billion by lenders to Alameda Research, another Bankman-Fried venture.

An $11 billion forfeiture order was also set, authorizing the use of seized assets to compensate the victims.

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While federal prosecutors had advocated for a 40 to 50-year sentence, Bankman-Fried’s defense argued for substantially less.

His defense lawyer Marc Mukasey differentiated Bankman from notorious fraudsters like Bernie Madoff.

He said Bankman was "not a ruthless financial serial killer" but an "awkward math nerd" who sought to reimburse customers following the downfall of FTX.

Bankman’s parents, Stanford University law professors Joseph Bankman and Barbara Fried, attended the sentencing.

They said: "We are heartbroken and will continue to fight for our son."

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