Crypto fraudster Bankman-Fried sentenced to 25 years
Sam Bankman-Fried was sentenced to 25 years in prison by a judge on Thursday for stealing $8 billion from customers of the now-bankrupt FTX cryptocurrency exchange he founded, the last step in the former billionaire wunderkind’s dramatic downfall.
US District Judge Lewis Kaplan handed down the sentence at a Manhattan court hearing after rejecting Bankman-Fried’s claim that FTX customers did not actually lose money and accusing him of lying during his trial testimony. A jury found Bankman-Fried, 32, guilty on Nov. 2 on seven fraud and conspiracy counts stemming from FTX’s 2022 collapse in what prosecutors have called one of the biggest financial frauds in US history.
Federal prosecutors had sought a prison sentence of 40 to 50 years. Bankman-Fried’s defense lawyer Marc Mukasey had argued that a sentence of less than 5-1/4 years would be appropriate.
Addressing the judge, Bankman-Fried said, “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.”
Referring to his FTX colleagues, Bankman-Fried told the judge, “They put a lot of themselves into it, and I threw that all away. It haunts me every day.”
Three of his former close associates testified as prosecution witnesses at trial that he had directed them to use FTX customer funds to plug losses at Alameda Research.
‘Massive in scale’
Nicolas Roos, a prosecutor with the US Attorney’s office in Manhattan, told the judge, “The criminality here is massive in scale. It was pervasive in all aspects of the business.”
During the hearing, Mukasey sought to distance his client from notorious fraudsters like Bernie Madoff.
“Sam was not a ruthless financial serial killer who set out every morning to hurt people,” Mukasey said, describing his client as an “awkward math nerd” who worked hard to get customers their money back after FTX’s collapse.
“Sam Bankman-Fried doesn’t make decisions with malice in his heart,” Mukasey added. “He makes decisions with math in his head.”
Bankman-Fried testified in his own defense that he made mistakes such as not implementing a risk management team, but denied he intended to defraud anyone or steal customers’ money.
His parents, Stanford University law professors Joseph Bankman and Barbara Fried, attended the sentencing.
A Massachusetts Institute of Technology graduate, Bankman-Fried rode a boom in the values of bitcoin and other digital assets to a net worth of $26 billion, according to Forbes magazine, before he turned 30.
Bankman-Fried became known for his mop of unkempt curly hair and commitment to a movement known as effective altruism, which encourages talented young people to focus on earning money and giving it away to worthy causes. He also was one of the biggest contributors to Democratic candidates and political causes ahead of the 2022 US midterm elections.
But prosecutors have said the responsible image he cultivated concealed his years-long embezzlement of customer funds.
Bankman-Fried has been detained at the Metropolitan Detention Center in Brooklyn since August 2023, when Kaplan revoked his bail after finding he likely tampered with witnesses at least twice.
