FTX founder Sam Bankman-Fried was sentenced to 25 years in prison on Thursday for the large fraud and conspiracy that doomed his cryptocurrency exchange and a related hedge fund.
The sentence in Manhattan federal court was significantly lower than the 40 to 50 years in prison that federal prosecutors wanted for Bankman-Fried, and rather more than the five to six-and-a-half years that his lawyers had suggested.
“There may be a risk that this man will probably be in position to do something very bad in the longer term,” Judge Lewis Kaplan before he sentenced the 32-year-old. “And it is not a trivial risk in any respect.”
Kaplan said the sentence has “the aim of disabling him to the extent that may appropriately be done for a big time period.”
Before he was sentenced, Bankman-Fried spoke contritely concerning the actions that landed him in court.
“They built something really beautiful and I threw all of that away,” he said of his co-workers at FTX, an organization once valued at $32 billion. “It haunts me each day.”
“Lots of people feel really let down. And so they were very let down,” he said. “And
I’m sorry about that. I’m sorry about what happened at every stage.”
“It has been excruciating to look at this all unfold,” he told Kaplan. “Customers don’t deserve this level of pain.
“I used to be the CEO of FTX and I used to be responsible.”
Indicted FTX founder Sam Bankman-Fried leaves the U.S. Courthouse in Recent York City, July 26, 2023.
Amr Alfiky | Reuters
Manhattan U.S. Attorney Damian Williams, in an announcement after the sentencing, said, “Samuel Bankman-Fried orchestrated one among the biggest financial frauds in history, stealing over $8 billion of his customers’ money.”
“His deliberate and ongoing lies demonstrated a brazen disregard for his customers’ expectations and disrespect for the rule of law, all in order that he could secretly use his customers’ money to expand his own power and influence,” Williams said.
The highest prosecutor said that the sentence not only will prevent Bankman-Fried from committing fraud again, but additionally is “a vital message to others who is perhaps tempted to have interaction in financial crimes that justice will probably be swift, and the results will probably be severe.”
Bankman-Fried’s family, in an announcement, said, “We’re heartbroken and can proceed to fight for our son.” Each Joseph Bankman and Barbara Fried, who’re Stanford Law professors, were in court for the sentencing hearing.
Barbara Fried and Allan Joseph Bankman, parents of FTX Co-Founder Sam Bankman-Fried, arrive at court in Recent York, US, on Thursday, March 28, 2024. Sam Bankman-Fried returns to court for sentencing after being convicted of an enormous fraud that led to the collapse of his FTX exchange.
Yuki Iwamura | Bloomberg | Getty Images
Before he sentenced SBF, Kaplan said he rejected “the whole lot of defendant’s argument there was no loss” at FTX, calling that claim “misleading, logically flawed and speculative.”
After Kaplan ruled on the rule of thumb enhancement, several victims of Bankman-Fried talked concerning the damage to their lives from his crimes.
Bankman-Fried, who was wearing a beige jailhouse jumpsuit, checked out the victims as they talked to the judge.
A jury in November convicted Bankman-Fried of seven counts and held him liable for the roughly $10 billion of customer deposits that went missing in 2022.
The costs included wire fraud and conspiracy to commit wire fraud against FTX customers and against lenders to sister hedge fund Alameda Research; conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors; and conspiracy to commit money laundering.
Jurors reached their verdict after only about three hours of deliberations. For a high-profile monthlong trial that involved nearly 20 witnesses and tons of of exhibits, experts told CNBC they’d never seen such a speedy decision.
Bankman-Fried plans to appeal his conviction and sentence.
WATCH: The collapse of FTX: Insiders Tell All
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