Sam Bankman-Fried sentenced to 25 years
Sam Bankman-Fried has been sentenced to 25 years in prison for masterminding the $8bn fraud that led to the collapse of cryptocurrency exchange FTX. He was found guilty on seven charges of wire fraud and conspiracy in November 2023.
Key events
Sam Bankman-Fried said Thursday that FTX’s customers “could have been paid back. There were enough assets. There are enough assets”. He has made a similar argument in court filings leading up the trial that the bankrupt exchange held enough cryptocurrency that it could have repaid its account holders, who lost nearly $8bn when it shuttered.
Earlier in the hearing, Judge Lewis Kaplan rejected this argument, saying Bankman-Fried still committed fraud by using his customers’ assets for his own ends.
“A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back what he stole,” Kaplan said. The current CEO , has also rejected Bankman-Fried’s argument.
Bitcoin’s price has skyrocketed since the collapse of FTX in November 2022, cresting $70,000 in recent weeks. Much of the cryptocurrency held by FTX is in bitcoin.
Judge Lewis Kaplan said Sam Bankman-Fried’s claim that FTX’s customers will get their money back “is misleading, it is logically flawed, it is speculative.” He said that this argument for leniency did not hold water. He said he did not plan to impose the maximum sentence of 110 years, though.
Lawyers for Bankman-Fried have has said that the exchange has the assets to make its customers whole. Bankman-Fried has claimed “the harm to customers, lenders and investors is zero”.
FTX’s caretaker CEO has called this declaration “categorically, callously, and demonstrably false”. John Ray III said Bankman-Fried was living a “life of delusion”.
Kaplan said that Bankman-Fried’s crimes had cost his victims $550m and that, overall, FTX customers lost $8bn and that its investors lost $1.7bn.
‘I am sorry’: Sam Bankman-Fried apologizes in court before sentencing
Bankman-Fried told the court Thursday morning, “I am sorry”. Previously, Bankman-Fried had expressed little contrition for his role in what happened at FTX. He maintained throughout his trial that he had not committed fraud. On Thursday, however, he said he made “a series of bad decisions” that “haunts me every day”.
“A lot of people feel really let down, and they were very let down, and I am sorry about that. I am sorry about what happened at every stage,” he said. “My useful life is probably over”.
Judge says Sam Bankman-Fried committed witness tampering and perjury in addition to fraud
Judge Lewis Kaplan said at the start of the hearing that Sam Bankman-Fried had committed crimes during and after his trial in addition to the wire fraud and conspiracy to launder money the 32-year-old was convicted of.
Kaplan said Bankman-Fried communicated with FTX’s former general counsel before the ex-CEO was remanded into custody. Bankman-Fried’s bail was revoked before his trial after the diary of his ex-girlfriend, Alameda Research CEO Caroline Ellison, leaked to The New York Times. Bankman-Fried also committed perjury while testifying, Kaplan said, when Bankman-Fried said that he had not known that Alameda Research, a hedge fund closely tied to FTX, was spending FTX customer deposits for its own ends.
Sam Bankman-Fried’s parents are in the courtroom to witness their son’s sentencing.
Joseph Bankman and Barbara Fried are both law professors at Stanford University, the former of tax law and the latter of legal ethics. Bankman-Fried said they were not involved in “any of the relevant parts” of FTX’s operation.
A lawsuit filed by the company itself last year alleges, however, that the pair helped themselves to millions of dollars for their own “pet causes” and personal enrichment. The company says it aims to recover the money that the two professors received from the company. Discussions between Bankman, Fried and their son included emails in which the father whined to his son for a higher salary, per the suit. Bankman and Fried have called the lawsuit’s allegations “completely false”.
Kraken blasts FTX despite its own problems
A rival cryptocurrency exchange has taken aim at the now-bankrupt FTX and its disgraced former CEO Sam Bankman-Fried. Kraken, which allows trades of multiple kinds of cryptocurrency and is valued at nearly $11bn, said in a statement Thursday: “Sam Bankman-Fried founded his empire on false promises and stolen client funds. SBF now faces consequences, but this does not undo the immense harm he has caused to millions of people and the crypto industry. Good crypto actors must set the tone by improving education, calling out bad actors, and adhering to crypto’s founding principles of personal ownership and public verifiability.”
Despite lumping itself in with the “good crypto actors,” Kraken has faced its own share of legal controversies. In November 2023, the US Securities and Exchange Commission sued the company for allegedly operating as a securities exchange without registering. Kraken was also accused of using customer funds to pay its own expenses, the very thing that got Bankman-Fried convicted of fraud. In February 2023, the company agreed to halt the operation of its staking service as part of a settlement with the SEC over alleged unregistered sales of securities.
Bankman-Fried sentencing hearing under way in Manhattan
Sam Bankman-Fried’s sentencing hearing has begun in Manhattan federal court before Judge Lewis Kaplan.
Facing more than 100 years in prison, though prosecutors have asked for 40-50 and his own attorneys have asked for just six, he has been detained in Brooklyn since his trial in November. The former CEO is in the courthouse.
Timeline: the rise and fall of Sam Bankman-Fried
Timeline
The rise and fall of Sam Bankman-Fried
Show
Founding FTX
Sam Bankman-Fried, along with former Google employee Gary Wang, found the crypto exchange FTX. Bankman-Fried is in his 20s and had just left the trading firm Jane Street Capital.
FTX receives $100m investment
Cryptocurrency exchange Binance’s then CEO Changpeng Zhao invests $100m in FTX in exchange for 20% of the company.
Bankman-Fried and FTX move to the Bahamas
Bankman-Fried relocates the firm’s headquarters from Hong Kong to the Bahamas in 2021, buying up millions in real estate and setting up residence in the nation.
Partnerships and big investments
Bankman-Fried and FTX strike a deal on the company’s first big partnership, reaching a sponsorship deal with Mercedes’ Formula One racing team. Meanwhile, FTX raises hundreds of millions in a funding round and is valued at $25bn.
FTX valuation swells to $32bn
Bankman-Fried raises a $400m in a Series C financing round, as the company’s valuation balloons to $32bn.
FTX launches Super Bowl ad
Bankman-Fried pours millions of dollars into a Super Bowl ad featuring Larry David, as FTX makes a bid for the mainstream.
Crypto Bahamas puts SBF in the spotlight
FTX holds an event called Crypto Bahamas, featuring celebrities like Gisele Bündchen and Tom Brady. Bankman-Fried appears on stage with former world leaders Bill Clinton and Tony Blair.
Sam Bankman-Fried the campaign donor
Bankman-Fried puts around $40m into backing various political campaigns, becoming an emerging power player in Washington.
Reports emerge of FTX’s shaky finances
Cryptocurrency news site CoinDesk publishes a story showing that FTX’s finances may be shakier than previously known, leading to a surge of media coverage and concern from investors. A customer run on deposits leads to crisis at the exchange.
Bankman-Fried resigns and FTX goes bankrupt
Bankman-Fried resigns after a week of chaos and missing funds.
Bankman-Fried arrested
Authorities arrest Bankman-Fried in the Bahamas and he is extradited to the US. He is charged with conspiracy and fraud.
Bail revoked, sent to jail
Bankman-Fried’s bail is revoked after the diary of his former FTX executive Caroline Ellison leaks to the New York Times. He is sent to jail awaiting trial.
Trial begins
Criminal trial begins in Manhattan federal court, with former close allies and FTX executives testifying against Bankman-Fried.
Bankman-Fried found guilty
A jury finds Bankman-Fried guilty on all seven charges of conspiracy and wire fraud. He faces potential decades in prison.
How did we get here? FTX’s collapse and Sam Bankman-Fried’s trial
FTX imploded in November 2022 after Bankman-Fried and those in his inner circle comingled funds from the exchange with a closely associated hedge fund, Alameda Research. The result was Bankman-Fried and others using their customers’ money for their own personal ends. The illegal mixture created an $8bn budget shortfall that, when enough customers asked to withdraw their cryptocurrency, brought the exchange crashing down.
Bankman-Fried maintained his innocence throughout a month-long trial last year. Prosecutors said that the CEO “misappropriated and embezzled” billions of dollars in his management of FTX. He was convicted in November on seven counts of wire fraud and conspiracy to launder money.
Bankman-Fried continues to contend that any mistakes he made have solutions within easy reach, writing in a February bankruptcy filing that FTX’s “harm to customers, lenders and investors is zero” because “the money was there – not lost”.
The CEO appointed to oversee FTX’s complex bankruptcy, John Ray, has lambasted Bankman-Fried’s conduct during the trial and its aftermath. He called Bankman-Fried’s recent statements “demonstrably false”.
“Mr Bankman-Fried continues to live a life of delusion. The ‘business’ he left on 11 November 2022 was neither solvent nor safe,” Ray wrote in a 20 March court filing. Ray said Bankman-Fried lavished company funds on “luxury homes, private jets, and overpriced speculative ventures”.
“Customers will never be in the same position they would have had they not crossed paths with Mr Bankman-Fried and his so-called brand of ‘altruism’,” Ray wrote.
Bankman-Fried’s inner circle lived with him in a $35m, 12,000 sq ft penthouse overlooking a yacht marina in the Bahamas while they ran the company together.
In a stark reversal of fortune, though, several members of FTX’s top brass testified against him during his trial. Caroline Ellison, his on-again, off-again girlfriend of several years and the CEO of Alameda Research, served as the prosecution’s star witness. She confessed to committing fraud and said on the stand that she had done so repeatedly at Bankman-Fried’s direction. She made a deal with prosecutors to plead guilty to seven counts of wire fraud, securities fraud and money laundering.
‘Old-fashioned embezzlement’: where did all of FTX’s money go?
Sam Bankman-Fried oversaw its collapse – now the crypto firm is in bankruptcy proceedings as contentious as his fraud trial
The rise and fall of Sam Bankman-Fried: an unrepentant ex-mogul faces down decades in prison
The former CEO of FTX, once a king of cryptocurrency, saw a swift reversal of his fortunes starting in November 2022.
Sam Bankman-Fried requested a six-year sentence
Sam Bankman-Fried’s lawyer said in late February that the suggested 100-year prison sentence for the FTX founder would be “grotesque” and “barbaric” and at most a term of a few years behind bars would be appropriate for crimes that the disgraced cryptocurrency mogul still disputes.
In pre-sentencing arguments filed just minutes before deadline in Manhattan federal court, attorney Marc Mukasey said a report by probation officers improperly calculated federal sentencing guidelines to recommend a sentence just 10 years short of the maximum potential 110-year sentence. Bankman-Fried, known for his casual clothing and wild hair, was convicted of seven counts of wire fraud and conspiracy to launder money in November 2023.
A proper sentence, Mukasey said, would be based on guidelines that would call for between five and six and a half years in prison, at most.
“Sam is not the ‘evil genius’ depicted in the media or the greedy villain described at trial,” Mukasey wrote. “Sam is a first-time, non-violent offender, who was joined in the conduct at issue by at least four other culpable individuals, in a matter where victims are poised to recover – were always poised to recover – a hundred cents on the dollar.”
US prosecutors petitioned for Sam Bankman-Fried to be sentenced to 40-50 years in prison
In mid-March, federal prosecutors requested that judge Lewis Kaplan sentence Bankman-Fried to at least four decades in prison. The maximum penalty he could face would amount to more than 100 years.
“His life in recent years has been one of unmatched greed and hubris; of ambition and rationalization; and courting risk and gambling repeatedly with other people’s money,” the US attorneys in Manhattan wrote. “And even now Bankman-Fried refuses to admit what he did was wrong.”
Sam Bankman-Fried to be sentenced in Manhattan federal court, faces over 100 years in prison
Sam Bankman-Fried, once the CEO of FTX and a billionaire wunderkind of the cryptocurrency world, will be sentenced to prison Thursday morning in New York City. He was convicted on seven counts of wire fraud and conspiracy to launder money in November.
Should the judge in his case impose the harshest penalty allowed, the 32-year-old would face more than 100 years and die an incarcerated man, a possibility his lawyer has called “grotesque”.
In advance of the hearing, lawyers for the US Department of Justice and for Bankman-Fried have engaged in bitter back-and-forth over how long of a prison sentence would be appropriate. His lawyers have argued for a minimal sentence of just six years. Prosecutors are advocating for 40-50 years for his “unmatched greed and hubris” in perpetrating the $8bn (£6.3bn) fraud.
Sam Bankman-Fried deserves 40 to 50 years for FTX fraud, prosecutors say.
Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
