Disgraced cryptocurrency entrepreneur Sam Bankman-Fried was sentenced to 25 years in prison Thursday for presiding over a multibillion-dollar fraud scheme.
Earlier in March, prosecutors had recommended a sentence of 40-50 years, less than half the possible maximum for his convictions. They argued that would be “commensurate with the extraordinary dimensions of his crimes” committed at his financial empire, FTX, which was the second-largest cryptocurrency exchange until CEO Bankman-Fried’s fall from grace in 2022.
The 32-year-old’s lawyers asked for a 63-78 month sentence, citing his autism diagnosis and positive intentions when starting his company in 2019.
Judge Lewis Kaplan said during a nearly three-hour sentencing hearing that he weighed “the enormous harm [Bankman-Fried] did, the brazenness of his actions, his exceptional flexibility with the truth and his apparent lack of any real remorse,” according to The Wall Street Journal.
Bankman-Fried was convicted in November of all seven charges he faced for overseeing massive wire fraud, securities fraud and money laundering at FTX, where he schemed customers and investors out of as much as $10 billion on the platform. Jurors on the New York court sided with prosecutors’ accusations that he used those billions to fund venture capital investments, invest in luxury real estate, donate to political campaigns and repay lenders to Alameda Research, FTX’s sister company.
His downfall marked a stunning reversal of fortune for a man who once graced magazine covers, headlined conferences and mingled with A-list celebrities and athletes.
At trial, Bankman-Fried testified that he never plotted to cheat people out of their investments and didn’t realize his company was billions of dollars in debt until the fall of 2022. His three days of testimony were widely regarded as a disaster, with the onetime darling of the crypto world laying blame on other executives at the company and repeatedly answering prosecutor’s questions with “I don’t recall.”
Meanwhile, his top associates testified that he directed them to lie to the public and siphon billions in customer money from FTX to Alameda, which he was explicitly forbidden from doing by FTX’s terms of service. Among the witnesses against him was Caroline Ellis, Alameda’s CEO and Bankman-Fried’s former girlfriend, who said FTX began unraveling in the spring of 2022 with the crash of the crypto market. Bankman-Fried, she said, directed her to give one of Alameda’s biggest lenders a misleading balance sheet that hid how much money FTX had borrowed from its customers.
“I didn’t want to be dishonest, but I also didn’t want them to know the truth,” she testified.
“Overall, it was the worst week of my life,” Ellison said of the company’s downfall in the fall of 2022. “I felt this sense of relief that I didn’t have to lie anymore, and that I could start taking responsibility, even though I felt indescribably bad.”
Ellison pleaded guilty to fraud charges for her role in the scheme, in exchange for cooperating with prosecutors.
It’s possible that those defrauded by Bankman-Fried could recoup payment from him. His lawyers told the court last month that investments he made with stolen money have dramatically appreciated in value and they expect all of FTX’s customers and creditors will be fully repaid.