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28 Mar, 2024 19:59

Sam Bankman-Fried sentenced to 25 years in prison

The disgraced crypto mogul “orchestrated one of the largest financial frauds in history,” government prosecutors argued
Sam Bankman-Fried sentenced to 25 years in prison

FTX co-founder Sam Bankman-Fried has been sentenced to 25 years in a US federal prison for stealing billions of dollars from customers and defrauding investors. The one-time cryptocurrency guru has also been ordered to pay $11 billion in restitution.

The sentence was handed down by New York judge Lewis Kaplan on Thursday. At 25 years, the sentence is half the length of the prison term recommended by prosecutors, but significantly harsher than the six years requested by Bankman-Fried’s lawyers.

Explaining why he was locking Bankman-Fried away for more than two decades, Kaplan told the court that “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.”

The 32-year-old entrepreneur was convicted in November of seven criminal counts, including wire fraud, securities fraud conspiracy, and money laundering. The charges stemmed from Bankman-Fried’s time running FTX, a now-defunct cryptocurrency exchange.

Bankman-Fried embezzled around $8 billion from FTX customers and nearly $2 billion from investors to his hedge fund, Alameda Research. The hedge fund then spent this cash on high-risk speculative investments, real estate purchases, and political donations, mostly to the Democratic Party. When lenders asked for their money back, Bankman-Fried used money belonging to FTX customers to pay them off.

The scheme was uncovered when a glut of withdrawals from FTX bankrupted the company in 2022. A month after FTX collapsed, Bankman-Fried was arrested in the Bahamas and extradited to the US.

Before his crimes were exposed, Bankman-Fried was worth more than $22 billion, making him the 32nd-richest American, according to Forbes magazine. Bankman-Fried met with heads of state, advised the US Congress on cryptocurrency regulation, and vowed to eventually give away his wealth for the betterment of humanity.

“I’m sorry about what happened at every stage,” the FTX founder said in court on Thursday. “At the end of the day, I failed everyone I cared about.”

Speaking after the sentence was handed down, US Attorney Damian Williams rejected Bankman-Fried’s remorseful statement. “Samuel Bankman-Fried orchestrated one of the largest financial frauds in history,” Williams told the court, adding that “his deliberate and ongoing lies demonstrated a brazen disregard for his 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.”

Bankman-Fried will appeal both his conviction and his 25-year sentence, his lawyers said.