Sam Bankman-Fried, co-founder of FTX, will serve 25 years in prison after being found guilty of defrauding his clients, investors and lenders.
The man who presided over the biggest crypto crash in history received his sentence in a federal court in Manhattan on Thursday from US Judge Lewis Kaplan, who presided over Bankman-Fried’s trial last fall.
He faced up to 110 years. Prosecutors argued for a sentence of 40 to 50 years, while Bankman-Fried’s lawyers asked for six and a half years.
Sentences for white-collar crimes have varied in recent years, from 150 years for Bernard Madoff to 11 years for Elizabeth Holmes.
In his final statement before the judge, 32-year-old Bankman-Fried said what happened at FTX “haunts me” and that “I made a lot of mistakes.”
As CEO, “I was responsible at the end of the day.”
Bankman-Fried’s defense attorney tried to draw a distinction between his client and Madoff, who ran the largest Ponzi scheme in history.
“Madoff stole from Holocaust survivors,” his lawyer said. “That’s not Sam. He didn’t want to inflict personal pain on anyone in any way. Sam wasn’t a ruthless financial serial killer. He wasn’t predatory. He made decisions with math in his head, not malice in his heart. “
Dozens of FTX victims, including those who said they lost their life savings due to the cryptocurrency’s demise, submitted letters urging Kaplan to impose a harsh sentence.
The federal sentencing guidelines, though advisory rather than mandatory, suggest prison enhancements that lengthen sentences as victims’ losses increase.
Kaplan had to weigh the billions that prosecutors say Bankman-Fried stole from FTX customers against claims made by FTX that those harmed could be fully repaid through FTX’s bankruptcy.
In January, lawyers for the defunct exchange told a Delaware bankruptcy court judge that a plan for FTX to fully repay customers and general unsecured creditors was “within reach.”
But the judge was not sympathetic to that claim, calling the claim “misleading” and “speculative.”
Kaplan also had some strong words for Bankman-Fried before handing down his sentence, citing the “nonsense” of his actions, his “exceptional flexibility with the truth” and “his apparent lack of any remorse.”
“He knew it was wrong,” added the judge.
Rise and fall
The sentencing of Bankman-Fried completes a dramatic fall for a one-time billionaire who ran the world’s second-largest crypto exchange and was the face of a boom in digital assets during the early years of the pandemic.
Story continues
His empire exploded in late 2022 when FTX filed for bankruptcy and he was arrested by authorities in the Bahamas.
His trial last fall captivated the financial world. A 12-person jury ultimately sided with prosecutors who argued that Bankman-Fried intentionally stole up to $14 billion in customer deposits from his cryptocurrency in a scheme he ran with three of his top executives.
The group, prosecutors alleged, allowed Bankman-Fried’s sister crypto-trading firm Alameda Research “secret” backdoor access to FTX’s customer deposits, then spent the money on investments, loan repayments, political donations and real estate.
“He spent his clients’ money, and he lied to them about it,” prosecutor Nicolas Roos said in the government’s closing argument.
The other three FTX executives — Alameda CEO Caroline Ellison, FTX co-founder Gary Wang, and FTX engineering director Nishad Singh — pleaded guilty to fraud charges and testified against Bankman-Fried under plea deals with the government.
They are expected to be sentenced later in 2024.
Bankman-Fried testified that poor business decisions and management error — and not fraud — were to blame for the undoing of his cryptocurrency exchange.
“Did you cheat on someone?” During the defendant’s risky venture, Bankman-Fried’s lawyer, Mark Cohen, asked him to take the stand in the final days of the trial.
“No, I haven’t,” answered Bankman-Fried.
Thursday’s sentencing ends all criminal cases against Bankman-Fried. Prosecutors have withdrawn plans to take to trial a separate set of charges alleging Bankman-Fried committed bank fraud and bribed Chinese officials.
However, Bankman-Fried can still appeal his conviction and sentence.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
Click here for the latest crypto news, updates and more related to ethereum and bitcoin prices, crypto ETFs and cryptocurrency market implications
Read the latest financial and business news from Yahoo Finance
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
UnCirculars – Cutting through the noise, delivering unbiased crypto news
