28th March, 2024
Crypto mogul Sam Bankman-Fried (SBF) has been sentenced to 25 years in prison for stealing billions of dollars from customers of his cryptocurrency exchange FTX.
After a two hour hearing on Wednesday, the U.S. District judge, Lewis Kaplan, said Bankman-Fried, 32, knew what he was doing was criminal and regretted making a bad bet about the likelihood of being caught.
The prison sentence is not at the upper end of what prosecutors had asked for (they pushed for as much as 50 years), but it certainly is not what SBF’s legal team were hoping for, the BBC reports.
Prosecutors say Bankman-Fried took more than $10bn (£7.9bn) from unsuspecting customers in “one of the biggest financial frauds” in US history.
FTX was valued at $32bn before it went bankrupt in 2022 and SBF crafted a public image that drew in celebrities, politicians and business titans.
Reuters reports that a jury had found Bankman-Fried, 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 U.S. history.
“He knew it was wrong,” Kaplan said of Bankman-Fried before handing down the sentence.
“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.”
Bankman-Fried stood with his hands clasped before him as Kaplan read the sentence. He was led out of the courtroom by members of the U.S. Marshals Service when the hearing ended.
Reuters reports that Bankman-Fried, wearing a beige short-sleeve jail t-shirt, acknowledged during 20 minutes of remarks to the judge that FTX customers had suffered and he offered an apology to his former FTX colleagues.
The sentence marked the culmination of Bankman-Fried’s plunge from an ultra-wealthy entrepreneur and major political donor to the biggest trophy to date in a crackdown by U.S. authorities on malfeasance in cryptocurrency markets.
Bankman-Fried has vowed to appeal his conviction and sentence.
Kaplan said he had found that FTX customers lost $8 billion, FTX’s equity investors lost $1.7 billion, and that lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion.
“The defendant’s assertion that FTX customers and creditors will be paid in full is misleading, it is logically flawed, it is speculative,” 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,” the judge added.
BBC’s Natalie Sherman reporting from court said “Bankman-Fried was quickly led out of the courtroom, and it appeared from our view that he did not have an opportunity to interact with his parents.
“Barbara Fried and Joseph Bankman lingered in the courtroom in an effort to escape the crush of press. The parents of the FTX founder have attended nearly every minute of the trial, maintaining a stoic appearance to the end.”