- Crypto mogul and FTX founder Sam Bankman-Fried has been sentenced to 25 years in prison
- Jurors reached the verdict in just three hours of deliberation
- Judge Kaplan said Bankman-Fried lacked “any remorse” and told lots of lies throughout the legal process
Renowned crypto entrepreneur and co-founder of bankrupt crypto exchange FTX, Sam Bankman-Fried, has been sentenced to 25 years in prison. Bankman-Fried was sentenced to prison today for his involvement in fraudulent activities that doomed his multi-billion-dollar crypto exchange and left many investors dispossessed of their funds to date.
“It doesn’t matter why things go bad, if you’re the CEO, it’s on you. I’m not the one who matters the most at the end of the day… My useful life is probably over. I’ve long since given what I had to give. I can’t do it from prison,” said Bankman-Fried in court today.
The 32-year-old faced over 100 years in jail, according to the Probation Department. Similarly, prosecutors had pressed for him to spend between 40 to 50 years in jail due to the perceived notoriety of his crime. However, Judge Kaplan who admitted today that a sentence like that “would be more than necessary,” due to the defendant’s “lack of remorse” surprisingly clamped down the expected sentence to 25 years.
“I am not diminishing the harm. The brazenness of his actions,” said Kaplan. “His exceptional flexibility with the truth. His apparent lack of any remorse. I want to add one further thought. I did not think it a fruitful use of time to spell out every lie.”
Last November, the formerly celebrated tech icon was slammed with seven criminal charges, including wire fraud conspiracy, conspiracy for money laundering, securities fraud conspiracy, and commodities fraud conspiracy. Considering the severity of these charges, the billionaire entrepreneur was bound for a lengthy prison term or life in jail despite earlier pleading not guilty to these charges.
Judge Kaplan determined that the total losses to victims of Sam Bakman-Fried’s fraudulent activities surpassed $550 million – which exceeded the maximum provision of Federal sentencing guidelines. Kaplan also said the investors and lenders were also injured parties” and faulted the defendant’s (Bankman-Fried’s) use of customers’ funds – to which he had no rights – and spending them on “speculative assets by Alameda” and other things.
“So I find the loss amount readily exceeds $550 million, the top tier,” said Kaplan. “I find investors lost $1.7 billion, lenders lost $1.3 billion, and customers, $8 billion.”
Bankman-Fried was found guilty of “obstruction of justice” by texting the former general counsel which Judge Kaplan said “did in fact constitute attempted witness tampering.” The judge made three perjury findings from the trial testimony.
He found that Bankman-Fried gave a perjured testimony when he claimed he knew nothing of $8 billion of FTX’s funds spent by its sister company Alameda until October of 2022. Alameda was a crypto trading firm that Bankman-Fried co-founded alongside FTX. The firm had borrowed over $8 million of FTX’s funds and later ran into a similar financial crisis which led to its eventual bankruptcy in 2022.
Kaplan also counted as perjury Bankman-Fried’s testimony that Alameda would need to borrow more customer funds from FTX to repay third-party loans. One of the victims, Sunil Kavuri, “flew in from London” as a witness. Sunil told the Judge he had “suffered for two years.”
“At least three people have committed suicide because of this FTX fraud,” added Sunil. “Other co-conspirators, aiders and abetters, need to be held accountable.”
Just before the sentence, Bankman-Fried’s lawyer Michael Mukasey pleaded with the judge to “sentence him with a compassionate heart.” In a lengthy appeal, Mukasey highlighted how his client isn’t Bernie Madoff who stole from holocaust survivors.
“He did not want to personally inflict pain on anyone in any way. Sam was not a ruthless financial serial killer. He wasn’t predatory. He makes decisions with math in his head, not malice in his heart.”
Despite the heartfelt plea from his lawyer who had earlier pleaded for five to six and half years, Sam Bankman-Fried will be away in jail for the next 25 years. Bankman-Fried’s imprisonment will remain a red-letter day in the crypto industry and will serve as a deterrent to similar crimes in the industry.