By Wonderwall.com Editors
5:00pm PDT, Apr 1, 2024
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Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange who was convicted of stealing $8 billion from customers, was sentenced to 25 years in prison in federal court on March 28. The sentence — which sparked strong reactions from Bankman-Fried's family, top officials and others — was much more severe than even prosecutors had pushed for in what they called "one of the largest financial frauds in history."
According to CBS News, Judge Lewis Kaplan explained of his decision, "There is a risk that this man will be in a position to do something very bad in the future. And it's not a trivial risk at all." He added that the harsh sentence was "for the purpose of disabling him to the extent that can appropriately be done for a significant period of time." Bankman-Fried was also ordered to forfeit $11.2 billion in assets.
Once hailed as crypto's "poster boy" and among the world's youngest billionaires, Bankman-Fried, 32, was found guilty in November 2023 of seven counts of fraud, conspiracy and money laundering. He had faced up to 110 years behind bars, with prosecutors asking for a 40-to-50-year sentence. His legal team sought six to seven years.
Judge Kaplan said that by his count, the now-bankrupt FTX exchange defrauded customers out of $8 billion, but equity investors also lost $1.7 billion and Alameda's lenders lost $1.3 billion. He also reportedly slammed Bankman-Fried for committing perjury and showing little remorse.
"The defendant's assertion that FTX customers and creditors will be paid in full is misleading, it is logically flawed, it is speculative," Judge Kaplan said. "A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back what he stole."
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Sam Bankman-Fried, wearing a prison jumpsuit, also spoke at his sentencing: "A lot of people feel really let down, and they were very let down. I'm sorry about that. I'm sorry about what happened at every stage," he said, according to CNBC.
"My useful life is probably over. It's been over for a while now since before my arrest," he continued.
As for his co-workers at FTX — once valued at more than $32 billion, according to CNBC– Bankman-Fried said his mistakes "haunt" him daily.
"They built something really beautiful and I threw all of that away," he said. "It's been excruciating to watch this all unfold. Customers don't deserve this level of pain. I was the CEO of FTX and I was responsible."
Keep reading to see how Bankman-Fried's parents and others reacted to his 25-year sentence…
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"Samuel Bankman-Fried orchestrated one of the largest financial frauds in history, stealing over $8 billion of his customers' money. His deliberate and ongoing lies demonstrated a brazen disregard for customers' expectations and disrespect for the rule of law, all so that he could secretly use his customers' money to expand his own power and influence. The scale of his crimes is measured not just by the amount of money that was stolen, but by the extraordinary harm caused to victims, who in some cases had their life savings wiped out overnight. As a result of his unprecedented fraud, Bankman-Fried faces 25 years in prison and forfeiture of over $11 billion dollars.
"Today's sentence will prevent the defendant from ever again committing fraud and is an important message to others who might be tempted to engage in financial crimes that justice will be swift, and the consequences will be severe." –Damian Williams, U.S. Attorney for the Southern District of New York, said in a statement
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"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" — Attorney General Merrick Garland said in a statement
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"He is 32 years old, and he will see the light of day. But he is going to spend a lot of time in a cell." –Bernie Madoff's former defense attorney, Ira Lee Sorkin, said in an interview with The New York Times on March 28
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"The FBI will aggressively investigate individuals, like Samuel Bankman-Fried, who engage in fraudulent schemes at the expense of the American public and our financial systems. We are proud of the successful collaboration that ended this massive mismanagement and misappropriation of billions of dollars. Today's sentencing should serve as a warning to others looking to use fraudulent means for personal gain — there are consequences for your actions." –FBI Director Christopher Wray said in a statement
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"In New York City today, Sam Bankman-Fried was sentenced to 25 years in prison for his role in the collapse of his crypto company, FTX. It's even worse news for his cellmate – he's stuck for 25 years with a guy who loves talking about crypto: 'It was protected by a blockchain! And they'll never get in the blockchain because…' 'Can you get me a shiv? No, it's for me.' 'It's safer than you think!'" —Jimmy Fallon said on "The Tonight Show" on March 28
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"Holy s*** he gave him less than Chelsea Manning (35 years) for a waaaaay worse crime." –Edward Snowden wrote in a since-deleted post on X, according to BitcoinMagazine.com
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Caroline Ellison, the former CEO of FTX's sister hedge fund Alameda Research and Sam Bankman-Fried's on-off girlfriend, has not reacted publicly to his sentencing. She served as the prosecution's star witness in Bankman-Fried's trial as part of a December 2022 plea deal in which she pleaded guilty to fraud, money laundering and conspiracy charges.
"I keep coming back to Ms. Ellison's testimony that he knew it was wrong. He knew it was criminal," Judge Kaplan said during Bankman-Fried's sentencing, according to CNBC.
"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," the judge concluded.
Ellison has not yet been sentenced.
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FTX co-founder Gary Wang — who was Sam Bankman-Fried's college roommate — also testified against Bankman-Fried as part of a plea deal and is awaiting his own sentencing. He has not commented publicly on Bankman-Fried's.
