Disgraced ex-FTX head Bankman-Fried sentenced to 25 years in prison

 April 3, 2024

Sam Bankman-Fried, the disgraced former co-founder and CEO of cryptocurrency exchange FTX, was finally served justice last week when he was sentenced following a conviction for defrauding customers and investors out of billions of dollars.

The federal judge ordered Bankman-Fried to serve 25 years in prison and delivered sharply critical remarks during the March 28 sentencing hearing in a New York federal court, according to The Washington Post.

The 25-year sentence imposed by U.S. District Judge Lewis Kaplan is roughly half of the 40-50 years that prosecutors had requested and just less than a quarter of the 105 years that court probation officers had recommended.

Convicted on seven felony fraud-related charges

According to a Justice Department press release at the time, Bankman-Fried, 31, was convicted in November of two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering, as well as one count each of conspiracy to commit commodities fraud and conspiracy to commit securities fraud.

The four wire fraud counts and the money laundering conspiracy charge each carried 20-year maximum sentences while the other two fraud conspiracy counts had five-year maximum sentences, meaning Bankman-Fried could have faced a maximum of 110 years behind bars.

At the time of the conviction, U.S. Attorney for the Southern District of New York Damian Williams said in a statement, "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."

"This case has always been about lying, cheating, and stealing, and we have no patience for it," the federal prosecutor added.

Massive fraud perpetrated against customers, investors, and lenders

Per The Post, Bankman-Fried's FTX was at one point one of the biggest digital currency exchanges in the world but, when cryptocurrency prices plummeted in 2022 and customers and investors came calling, it became clear that Bankman-Fried had been fraudulently using the funds he was supposed to be keeping safe for others for his own purposes.

The misuse of funds included financing his wealthy lifestyle, purchasing real estate and other risky investments, making donations to certain influential and powerful politicians, bribing foreign officials, and, in the end, attempting to plug holes in the balance sheet once the bottom fell out.

Once the dust settled in November 2022, Bankman-Fried resigned as the company collapsed and declared bankruptcy while customers, investors, and lenders were shorted by a combined $11 billion.

Judge Kaplan noted in his remarks that Bankman-Fried was "extremely smart" but also that "There is absolutely no doubt that Mr. Bankman-Fried’s name right now is pretty much mud around the world," given the massive fraud that had been perpetrated.

The judge further accused the defendant of perjuring himself during his trial testimony that was "often evasive, hair-splitting, dodging questions," and in response to Bankman-Fried's statement to the court, in which he professed to apologize but also shifted blame to others, Kaplan said he'd uttered, "never a word of remorse for the commission of terrible crimes."

Bankman-Fried "haunted" every day by the consequences of his actions

In an exclusive statement to ABC News after being sentenced, Bankman-Fried acknowledged that the "bad decisions" he'd made in 2022 were "most of what I think about each day," but noted, "I never thought that what I was doing was illegal. But I tried to hold myself to a high standard, and I certainly didn't meet that standard."

He also acknowledged the "despair, frustration and sense of betrayal" felt by those he'd defrauded and the "pain" of his co-workers and employees, and said, "I'm haunted, every day, by what was lost. I never intended to hurt anyone or take anyone's money. But I was the CEO of FTX, I was responsible for what happened to the company, and when you're responsible it doesn't matter why it goes bad. I'd give anything to be able to help repair even part of the damage. I'm doing what I can from prison, but it's deeply frustrating not to be able to do more."

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