Disgraced crypto king, Sam Bankman-Fried, has been sentenced to 25 years in prison for stealing $8 billion from customers of the now-bankrupt FTX cryptocurrency exchange he founded.
U.S. District Judge Lewis Kaplan handed down the sentence on Thursday, March 28, at a Manhattan court hearing after rejecting Bankman-Fried’s claim that FTX customers did not actually lose money and accusing him of lying during his trial testimony.
“He knew it was wrong,” Kaplan said of Bankman-Fried before handing down the sentence. “He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right.”
In addition to the prison sentence, Kaplan also ordered a forfeiture of $11.2 billion. However, he said there would be no restitution because it would be “impractical” in this case with so many victims.
At his sentencing, Bankman-Fried acknowledged during 20 minutes of remarks to the judge that FTX customers had suffered and he offered an apology to his former FTX colleagues.
Addressing the judge, Bankman-Fried said, “Customers have been suffering… I didn’t at all mean to minimize that. I also think that’s something that was missing from what I’ve said over the course of this process, and I’m sorry for that.”
Referring to his FTX colleagues, Bankman-Fried told the judge, “They put a lot of themselves into it, and I threw that all away. It haunts me every day.”
A jury found Bankman-Fried, 32, guilty on Nov. 2 on seven fraud and conspiracy counts stemming from FTX’s 2022 collapse in what prosecutors have called one of the biggest financial frauds in U.S. history.
Bankman-Fried’s cryptocurrency exchange company, FTX, went bust in 2022 with $8billion of customer funds missing. At its peak FTX was valued at $32billion (£26billion), and Bankman-Fried became a business celebrity, promoting the firm and enticing millions of customers to invest. Last November, a jury found Bankman-Fried had stolen billions of customer money ahead of FTX’s collapse in order to buy property, and make political donations and other investments.
Sam Bankman-Fried was born in 1992 in California to Barbara Fried and Joseph Bankman, both professors at Stanford Law School. He attended the Massachusetts Institute of Technology (MIT) in 2014 with a bachelor’s degree in physics and a minor in mathematics.
He started his finance career in 2013 as an intern at Jane Street Capital, a proprietary trading firm, trading international Exchange Traded Funds (EFTs). In September 2017 he moved to Berkeley, California, where he worked briefly at the Centre for Effective Altruism. By November, he co-founded the quantitative trading firm Alameda Research alongside Tara Hedley, after receiving funding from billionaire computer programmer Jaan Tallinn and investor Luke Ding.
In January 2018 he organised an arbitrage trade, taking advantage of the higher price of bitcoin in Japan compared to the US. He moved to Hong Kong after attending a cryptocurrency conference in Macau, and by April 2019 he had founded FTX.
In 2021 Bankman-Fried was included on the 2021 Forbes 30 Under 30 list. However, after his conviction he was included in the 2023 Forbes Hall of Shame list, featuring 10 picks the publication wished it could take back.