Sam Bankman-Fried, the disgraced founder of the failed FTX cryptocurrency exchange, was sentenced to 25 years in prison by a federal judge Thursday.
A federal jury in November 2023 convicted Bankman-Friend on seven counts of fraud and conspiracy related to the collapse of his cryptocurrency company and related hedge fund. The charges had carried a maximum prison term of 110 years. The U.S. government alleged that Bankman-Fried had cheated investors and customers out of upwards of $10 billion through FTX and his crytpo trading firm Alameda Research.
Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York issued the 25-year sentence at a hearing, finding that FTX customers had lost $8 billion. The judge increased the sentencing guidelines range for Bankman-Fried after finding that he had perjured himself during the trial and obstructed justice, and because total loss from FTX’s fraud was more than $550 million. Kaplan said he “rejects the entirety of defendant’s argument there was no loss” at FTX, calling the claim “misleading, logically flawed and speculative,” CNBC reported.
“He knew it was wrong,” Kaplan said at the sentencing hearing, per Reuters. “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.”
Federal prosecutors had recommended Bankman-Fried be sentenced to 40 to 50 years in prison; his defense team had argued he should receive a sentence of less than five years and three months.
According to prosecutors, Bankman-Fried, known as “SBF,” perpetrated a “wide-ranging scheme… to misappropriate billions of dollars of customer funds deposited with FTX” and to “mislead investors and lenders” to FTX and Alameda Research. During the trial, Bankman-Fried, who is now 32, testified that he never committed fraud and never intended to defraud FTX’s customers.
“Sam Bankman-Fried perpetrated one of the biggest financial frauds in American history — a multibillion-dollar scheme designed to make him the King of Crypto — but while the cryptocurrency industry might be new and the players like Sam Bankman-Fried might be new, this kind of corruption is as old as time,” U.S. Attorney Damian Williams of the Southern District of New York said in a statement in November after Bankman-Fried’s conviction. “This case has always been about lying, cheating, and stealing, and we have no patience for it.”
FTX’s collapsed came after crypto news and data site CoinDesk in November 2022 published an article citing what it said was a balance sheet for Alameda Research showing much of its assets were in token issued by sister company FTX — causing a run on FTX’s assets.
In December 2022, Bankman-Fried was arrested in the Bahamas and extradited to the U.S., where he was released on a $250 million bond with electronic monitoring and a requirement that he remain at his parents’ residence in Palo Alto, Calif.
The case has attracted widespread public interest and attention in Hollywood. Bankman-Fried’s spectacular fall has already spurred multiple documentaries and is expected to be fodder for future movies or series. Amazon was quick to put an FTX limited series project in development from the Russo brothers Amazon-based AGBO Studios and writer David Weil, creator of “Hunters.”
Investors in FTX had included Endeavor’s IMG sports division, NFL quarterback Tom Brady and New England Patriots owner Robert Kraft, according to bankruptcy court documents. Major FTX shareholders included Dan Loeb’s Third Point, Paradigm, Sequoia Capital, Thoma Bravo, Softbank, New Enterprise Associates (NEA), Temasek, Tiger Global Management and Coinbase, a crypto exchange competitor to FTX.
Following the FTX collapse and bankruptcy filing, celebrity spokespeople enlisted by the company — including Larry David, Tom Brady, Gisele Bündchen, Shaquille O’Neal and Stephen Curry — were named in a proposed class-action lawsuit accusing FTX and the “brand ambassadors” of deceptively encouraging consumers to invest in the crypto exchange.