Sam Bankman-Fried Sentenced to 25 Years in Prison
Sam Bankman-Fried, the previous cryptocurrency mogul who was convicted of fraud, was sentenced to 25 years in jail on Thursday, capping a rare saga that upended the multi-trillion-dollar crypto business and have become a cautionary story of greed and hubris.
Mr. Bankman-Fried’s sentence was shorter than the 40 to 50 years that federal prosecutors had really useful, however above the six-and-a-half-year sentence requested by the protection attorneys. A federal probation officer had really useful 100 years, just below the utmost potential penalty of 110 years behind bars.
The sentence was handed down by Choose Lewis A. Kaplan on the Federal District Court docket in Manhattan. Mr. Bankman-Fried, 32, was within the courtroom, clear shaven and carrying a free becoming brown jail uniform.
Earlier than the sentence was delivered, Mr. Bankman-Fried apologized to FTX clients, traders and workers. “Lots of people really feel actually let down, and so they have been very let down,” he mentioned. “I’m sorry about that. I’m sorry about what occurred at each stage.” He added that his choices “hang-out” him daily.
The sentencing signified the finale of a sweeping fraud case that uncovered the rampant volatility and risk-taking throughout the loosely regulated world of cryptocurrencies. In November 2022, Mr. Bankman-Fried’s crypto change, FTX, imploded nearly in a single day, erasing $8 billion in buyer financial savings. At a trial final fall, he was convicted of seven counts of fraud, conspiracy and cash laundering.
His sentence ranks as one of many longest imposed on a white-collar defendant in recent times. Bernie Madoff, who orchestrated a infamous Ponzi scheme that unraveled through the 2008 monetary disaster, obtained a 150-year sentence in 2009. He was in his 70s on the time and died 12 years later. Elizabeth Holmes, who was convicted of defrauding traders in her blood-testing startup, Theranos, was sentenced to 11 years and three months in 2022.
A consultant for Mr. Bankman-Fried didn’t instantly reply to a request for remark.
Simply 18 months in the past, Mr. Bankman-Fried was a company titan and one of many youngest billionaires on the planet. Together with his face plastered on billboards and journal covers, he may increase cash seemingly at will. He hobnobbed with actors, musicians and famous person athletes, cultivating an image as a nerdy do-gooder who supposed to donate all his wealth to charity.
Based mostly within the Bahamas, FTX was one of many largest marketplaces for cryptocurrencies — an easy-to-use platform the place traders may change {dollars} or euros for digital cash like Bitcoin and Ether. Its valuation was north of $30 billion.
However over lower than per week in November 2022, a run on deposits uncovered an $8 billion gap in FTX’s accounts. Mr. Bankman-Fried resigned, handing over energy to a workforce of attorneys who promptly filed for chapter. The subsequent month, he was arrested at his luxurious house within the Bahamas and charged with stealing from clients to finance billions in political contributions, charitable donations and investments in different start-ups.
The investigation moved with startling velocity for such a posh case. Inside months, three of Mr. Bankman-Fried’s high deputies, together with a former girlfriend, pleaded responsible to fraud costs and agreed to cooperate with prosecutors. Mr. Bankman-Fried was initially granted residence detention, however the decide revoked his bail in August after ruling that he had tried to intimidate witnesses, and despatched him to the Metropolitan Detention Middle in Brooklyn.
On the trial in October, Mr. Bankman-Fried’s former colleagues testified for the prosecution, telling a jury that they’d conspired with him to loot buyer accounts. When he took the witness stand, Mr. Bankman-Fried appeared evasive at instances, repeatedly claiming that he couldn’t keep in mind essential particulars of his FTX tenure.
After he was convicted, Mr. Bankman-Fried’s attorneys and household embarked on a long-shot campaign to safe a lenient sentence and rewrite the general public narrative about FTX’s failure. In a sentencing memo, Marc Mukasey, one of many protection attorneys, argued that Mr. Bankman-Fried had typically behaved surprisingly on the stand as a result of he was autistic. He additionally cited the mogul’s charitable initiatives, arguing that FTX was speculated to be a drive for good on this planet.
However the protection’s case centered on the cash that FTX customers misplaced when the change went underneath. Mr. Mukasey claimed that clients have been set to be made complete within the chapter course of, placing the losses attributable to Mr. Bankman-Fried’s actions at “zero.”
The federal government rejected that argument. Whereas FTX’s new management has predicted that clients will finally get their deposits again, the cash they obtain might be equal to the greenback worth of their holdings in November 2022 — and gained’t account for a current surge within the crypto markets that despatched Bitcoin to its highest-ever price.
Mr. Bankman-Fried “demonstrated a brazen disrespect for the rule of regulation,” prosecutors wrote in a sentencing memo. “He knew what society deemed unlawful and unethical, however disregarded that primarily based on a pernicious megalomania.”
Choose Kaplan mentioned on Thursday of FTX’s victims: “The defendant’s assurance that they are going to be paid in full is deceptive. It’s logically flawed. It’s speculative.”
Over the previous a number of weeks, the prosecutors filed dozens of letters from victims of Mr. Bankman-Fried’s crimes that laid out how the monetary losses had devastated their lives. One buyer mentioned FTX’s collapse led to “suicidal ideas.”
“Sam Bankman-Fried has to assume for the remainder of his lifetime of the multitude of lives he destroyed together with his selfishness and superficiality,” the shopper wrote. “I actually hope that justice will educate him the distinction between life and video video games.”
One FTX buyer, Sunil Kavuri, who misplaced $2 million within the cryptocurrency change’s implosion, spoke on the sentencing listening to. “I’ve lived the FTX nightmare for nearly two years,” he mentioned.
Mr. Mukasey sought to distance his shopper from different fraudsters. “Sam was not a ruthless monetary serial killer who set out each morning to harm folks,” he mentioned, including, “Actually, he’s a clumsy math nerd.”
Mr. Bankman-Fried has vowed to enchantment his conviction, hiring a lawyer from the regulation agency Shapiro Arato Bach to supervise that effort.
However Mr. Bankman-Fried appeared to just accept on Thursday that he can be in jail for a while. “On the finish of the day, my helpful life might be over now,” he mentioned.
Matthew Goldstein contributed reporting.