FTX founder Sam Bankman-Fried was sentenced to 25 years in prison on Thursday for the massive fraud and conspiracy that doomed his cryptocurrency exchange and a related hedge fund, Alameda Research.
The sentence in Manhattan federal court was significantly less than the 40 to 50 years in prison that federal prosecutors wanted for Bankman-Fried. But it was also much more than the five to six-and-a-half years suggested by his attorneys.
“There is a risk that this man will be in position to do something very bad in the future,” Judge Lewis Kaplan said before sentencing the 32-year-old and ordering him to pay $11 billion in forfeiture to the U.S. government.
“And it’s not a trivial risk at all,” Kaplan added.
The judge said that in his 30 years on the federal bench he had “never seen a performance” like Bankman-Fried’s trial testimony.
If Bankman-Fried was not “outright lying” during cross-examination by prosecutors, he was “evasive,” Kaplan said.
Jurors at trial likewise did not buy Bankman-Fried’s testimony, convicting him in November of seven criminal counts and holding him responsible for losing about $10 billion in customer money due to the securities fraud conspiracy.
Kaplan on Thursday said the prison term he imposed has “the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”
Before he was sentenced, Bankman-Fried spoke contritely about his conduct, even as he suggested that the billions of dollars prosecutors have said customers lost was the result of a “liquidity crisis” or “mismanagement,” and not due to fraud.
“My useful life is probably over,” he said while wearing a beige jailhouse jumpsuit. “It’s been over for a while now since before my arrest.”
“They built something really beautiful and I threw all of that away,” he said of his co-workers at FTX, a company once valued at $32 billion. “It haunts me every day.”
“A lot of people feel really let down. And they were very let down,” he said. “And
I’m sorry about that. I’m sorry about what happened at every stage.”
“It’s been excruciating to watch this all unfold,” he told Kaplan. “Customers don’t deserve this level of pain.”
“I was the CEO of FTX and I was responsible.”
But even as he took some responsibility, Bankman-Fried suggested that customers eventually would get back the money they placed with his exchange, and blamed a federal bankruptcy court for not making those customers whole yet.
Kaplan appeared to stop paying close attention at that point.
In response, Bankman-Fried crossed his arms and began rapidly tapping his right foot as he continued speaking.
Assistant U.S. Attorney Nicholas Roos, arguing for a prison sentence of up to five decades, scoffed at the suggestion that FTX’s collapse was the result of bad luck or leadership.
It was “not a liquidity crisis or act of mismanagement,” Roos said. “It was the theft” of billions of dollars of customer money around the world, the prosecutor said.
“It was a loss that affected people significantly.”
Indicted FTX founder Sam Bankman-Fried leaves the U.S. Courthouse in New York City, July 26, 2023.
Amr Alfiky | Reuters
Manhattan U.S. Attorney Damian Williams, in a statement after the sentencing, said, “Samuel Bankman-Fried orchestrated one of the largest financial frauds in history.”
“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,” Williams said.
Attorney General Merrick Garland said, “Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice. I
Bankman-Fried’s family, in a statement, said, “We are heartbroken and will continue to fight for our son.” Both Joseph Bankman and Barbara Fried, who are Stanford Law professors, were in court for the sentencing.
Barbara Fried and Allan Joseph Bankman, parents of FTX Co-Founder Sam Bankman-Fried, arrive at court in New York, US, on Thursday, March 28, 2024. Sam Bankman-Fried returns to court for sentencing after being convicted of a massive fraud that led to the collapse of his FTX exchange.
Yuki Iwamura | Bloomberg | Getty Images
Before he sentenced SBF, Kaplan said he rejected “the entirety of defendant’s argument there was no loss” at FTX, calling that claim “misleading, logically flawed and speculative.”
After Kaplan ruled on the guideline enhancement, several victims of Bankman-Fried talked about the damage to their lives from his crimes.
Bankman-Fried looked at the victims as they talked to the judge.
Bankman-Fried plans to appeal his conviction and sentence.
Three other people, who all testified against Bankman-Fried at trial, are awaiting their own sentencings after pleading guilty to criminal charges related to FTX and Alameda Research.
They are Caroline Ellison, the Alameda CEO who at one time dated Bankman-Fried, FTX engineering chief Nishad Singh and Gary Wang, the co-founder and chief technology officer of FTX.
WATCH: The collapse of FTX: Insiders Tell All
This is developing news. Check back for updates.
