Sam Bankman-Fried has been sentenced to 25 years in prison after being found guilty of fraud charges in connection to his collapsed cryptocurrency exchange FTX.
Bankman-Fried was charged with conspiracy to commit wire fraud, securities fraud, money laundering, and violations of campaign finance law in December 2022. The then-30-year-old allegedly defrauded millions of investors through FTX crypto schemes, including using customer investments in the amount of $8 million to fund side investments and pay off debts.
In November 2023 — after a trial that featured both shocking testimony from ex-girfriend/co-conspirator Caroline Ellison as well as evasive testimony from Bankman-Fried himself in his own defense — SBF was convicted of the federal charges, which carried a sentence of up to 115 years in prison.
Prior to sentencing, Bankman-Fried addressed the court and said the FTX collapse “haunts him every day.” “A lot of people feel really let down, and they were very let down, and I am sorry about that.” he said. “I am sorry about what happened at every stage. And there are things I should’ve done and things I shouldn’t have.”
SBF added prior to sentencing (via CNN), “My useful life is probably over. It’s been over for a while now.”
His lawyer, Marc Mukasey, told the judge, “Sam was not a ruthless financial serial killer who set out every morning to hurt people. His real motivations were misapprehended and misunderstood. Really, he’s an awkward math nerd.”
However, prosecutor Nicholas Roos argued, “Sam Bankman-Fried stole over $8 billion in customer money, and I emphasize stole because it was not a liquidity crisis, or an active mismanagement, or poor oversight from the top. It was not a bloodless financial loss on paper.
While the U.S. Probation Office advocated for a 100-year sentence, federal prosecutors recommended a 40-to-50-year sentence to the judge, as well as an $11 billion judgment; in making their case for the decades-long sentence, prosecutors cited SBF’s list of “bad ideas” to spin the demise of FTX.
In seeking a lighter sentence, SBF’s lawyers — who lobbied for a six-and-a-half-year punishment as a first-time, non-violent offender — called the prosecutors’ recommendations “grotesque” and argued that Bankman-Fried’s social awkwardness makes him a risk in a prison environment. At sentencing Thursday, Judge Kaplan ultimately handed down the 25-year sentence, adding that Bankman-Fried committed both witness tampering and perjury while on trial. The judge also ordered a forfeiture of $11 billion.
Once the third-largest crypto exchange in the world, FTX collapsed days after balance sheets related to Bankman-Fried’s investment firm Alameda Research were leaked. The fallout revealed the extent of the exchange’s financial insolvency, and it led to allegations that Bankman-Fried used investments made by FTX customers to pay off debts and make side investments and contributions, transferring funds without proper disclosure and oversight.
In December 2022, Ellison — CEO of the privately controlled hedge fund Alameda Research, which is owned by Bankman-Fried — pleaded guilty to criminal charges of conspiracy to commit wire fraud on customers of FTX, wire fraud on customers of FTX, conspiracy to commit wire fraud on lenders of Alameda Research and wire fraud on lenders of Alameda Research, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering. To avoid a lengthy prison sentence, Ellison testified against Bankman-Fried.
FTX co-founder Gary Wang also pleaded guilty to conspiracy to commit wire fraud on customers of FTX, wire fraud on customers of FTX, conspiracy to commit commodities fraud, and conspiracy to commit securities fraud. Like Ellison, he faced decades in prison before agreeing to testify against Bankman-Fried.
