In the final stage of the once-millionaire wunderkind’s spectacular collapse, Sam Bankman-Fried was sentenced to 25 years in jail by a judge on Thursday for stealing $8 billion from users of the now-bankrupt cryptocurrency exchange he established.
At a court hearing in Manhattan, U.S. District Judge Lewis Kaplan imposed the sentence, dismissing Bankman’s argument that FTX consumers did not genuinely lose money and concluding that he had lied during his trial testimony. On November 2, a jury found 32-year-old Bankman-Fried guilty of seven charges of fraud and conspiracy related to the collapse of FTX in 2022, which the prosecution described as one of the largest financial frauds in American history.
Bankman-Fried, according to Kaplan, has exhibited no regret.
“Kaplan stated he knew it was wrong.” “He was aware that it was illegal. He feels awful about the poor wager he placed on the possibility of being discovered. But, as is his right, he will not acknowledge anything.”
Wearing a beige jail T-shirt, Bankman-Fried apologized to his former FTX colleagues and recognized that FTX consumers had suffered during his 20-minute statement before the judge. But he did not confess to any criminal activity.
He has promised to challenge both his sentence and conviction.
While Kaplan read the sentence, Bankman-Fried stood with his hands clasped in front of him. After a brief conversation with his defense attorney, Marc Mukasey, he was escorted out of the courtroom by members of the U.S. Marshals Service.
The conviction was the last straw in U.S. authorities’ campaign against misconduct in cryptocurrency markets, which had seen Bankman-Fried go from being an extremely wealthy businessman and significant political supporter to receiving the largest award to date.
Attorney General of the United States Merrick Garland issued a statement saying, “There are substantial penalties for scamming customers and investors.” “Everyone should consider twice before hiding their financial crimes behind riches and power, or behind a new and bright object that they think only they are intelligent enough to grasp.”
Kaplan discovered that lenders to the Alameda Research hedge fund that Bankman-Fried established lost $1.3 billion, FTX’s customers lost $8 billion, and FTX’s equity investors lost $1.7 billion. A judge issued a forfeiture order worth $11 billion and gave the government permission to compensate victims with seized assets.
Federal prosecutors had sought a sentence of 40 to 50 years. Mukasey had argued for a sentence of less than 5-1/4 years.
Speaking to the magistrate, Bankman-Fried stated, “Clients have been enduring hardships. It was not my intention to downplay it. Also, I believe that was something I neglected to mention during this process, and I apologize.”
With reference to his colleagues at FTX, Bankman-Fried continued, “I took away everything they had invested a great deal of themselves in. I’m haunted by it daily.”
As prosecution witnesses, three former close associates stated that they were instructed by Bankman-Fried to utilize FTX client funds to cover Alameda Research’s losses. Each of the three has admitted guilt to fraud.
When Bankman-Fried claimed in court that he was unaware that Alameda Research had used client funds obtained from FTX, Kaplan argued he had lied.
Sam Bankman-Fried, a Massachusetts Institute of Technology graduate, has been sentenced to life in prison for allegedly tampering with witnesses. The judge, Judge Kaplan, compared him to Bernie Madoff and argued that he was a math nerd who tried to recover customers’ money after FTX’s collapse. Bankman-Fried’s parents, Joseph Bankman and Barbara Fried, attended the sentencing. He was known for his commitment to effective altruism and was a major contributor to Democratic candidates and causes. He has been detained at the Metropolitan Detention Center in Brooklyn since August 2023.
(Reuters)
