Sam Bankman-Fried was sentenced to 25 years in prison on Thursday by Manhattan Federal Judge Lewis Kaplan. A jury found Bankman-Fried guilty of one of the largest white-collar crimes in history roughly five months ago. The 32-year-old could be in jail until he’s 57.
“A man willing to flip a coin as to the continued existence of life on earth,” said Judge Kaplan on Thursday, shortly before sentencing. “Mr. Bankman-Fried knew that Alameda was spending customer funds on risky investments, political contributions and Bahamas real estate. The funds were not his to use.”
Earlier in the month, Federal prosecutors recommended Bankman-Fried receive a longer sentence of 40-50 years in prison for federal charges of fraud, conspiracy, and money laundering. The founder and CEO was found guilty of taking at least $8 billion of customer funds while at FTX, and over $2 billion from investors and lenders. He led a “pyramid of deceit” against his customers, using their crypto accounts as a personal piggy bank for risky investments. Jurors found Bankman-Fried guilty on all counts after a month-long trial, where the crypto King testified for just three days.
A federal judge found that Bankman-Fried committed perjury three times, lying under oath, during his criminal trial. SBF falsely testified that: he didn’t know Alameda spent FTX customer funds; he first learned of the $8 billion deficit in FTX customer funds in Oct. 2022; and the repayment of Alameda’s third party loans would require borrowing more customer funds from FTX.
A former federal prosecutor told CNN that Sam Bankman-Fried could be out in just 12.5 years, cutting his sentence in half, if he’s exhibits good behavior in prison. Even at just 12.5 years, SBF would still serve one of the longest sentences in the history of white collar crime.
Judge Kaplan rejected the defense’s argument that SBF should get just 6 years in prison because FTX customers are going “to be made whole.” His lawyers argued, speculatively, that customer losses were “minimal” because cryptocurrency’s price is on the rise, and creditors in FTX’s bankruptcy seem poised to be paid back in some capacity. This is not factual and gives SBF credit for factors outside of his control.
“A fortuitous run-up in the value of some cryptocurrencies bears no relation to the gravity of the crimes that were committed,” said Judge Kaplan on Thursday. “A thief who takes his loot to Las Vegas and successfully bets is not entitled to a sentencing reduction.”
Bankman-Fried’s fraudulent narrative bled into his criminal trial, where he continued to spin his own story until the final days of trial. SBF’s defense painted him as a naive, genius entrepreneur who got in over his head. However, federal prosecutors depicted the “golden boy of crypto” as a financially reckless CEO with little regard for rules.
“I am sorry,” said Bankman-Fried, addressing the court Thursday. “I am sorry about what happened at every stage. And there are things I should’ve done and things I shouldn’t have.”
The personal chaos of Bankman-Fried was on full display through the collapse of FTX. The CEO’s Adderal prescription and drug use became a central component of the legal proceedings. His fellow FTX and Alameda executives, who were also his ex-girlfriend and best friends, alleged he was not only a bad boss but a toxic person.
FTX was one of the largest cryptocurrency exchanges in the world, and its downfall sent shockwaves throughout cryptocurrency and the financial world. SBF’s fraud caused a network of bankruptcies, regulations, and financial toil that cryptocurrency is just now recovering from.
The SBF’s spin of events even seemed to bewilder himself, when he claimed to not recall certain details over 100 times. The founder of FTX and Alameda claimed to be largely ignorant of the inner workings of his companies. To see him as innocent, “you’d have to believe the defendant, who graduated from MIT and built two multibillion-dollar companies, was actually clueless,” said the prosecution in closing arguments.
Former Alameda Research CEO Caroline Ellison testified for the prosecution, saying SBF directed her to commit certain crimes. Ellison revealed that at one point, FTX considered raising funding from Mohammed Bin Salman, a Saudi Prince notorious for once detaining his own mother. SBF also asked Ellison to create alternate presentations of Alameda’s finances when the company was in massive debt. The testimony from the former CEO, who is also SBF’s ex-girlfriend, showed SBF’s awareness of his company’s dire finances.
Bankman-Fried’s lawyer, Marc Mukasey noted they would appeal this ruling. Moments before SBF’s sentencing, Mukasey remarked that the FTX founder made “decisions with math in his head, not malice in his heart.” It’s unclear when that appeal would happen, though it appears unlikely to change the outcome of this case.
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