Disgraced cryptocurrency entrepreneur Sam Bankman-Fried was sentenced to 25 years in prison and ordered to pay $11 billion in forfeiture on Thursday — less than a quarter of the time he potentially faced for what the feds called one of the largest financial frauds in U.S. history.
“There is a risk that this man will be in a position to do something very bad in the future, and it’s not a trivial risk, not a trivial risk at all,” Manhattan federal court Judge Lewis Kaplan said before announcing his decision.
“In part, my sentence will be for the purpose of disabling him — to the extent that can be done — for a significant amount of time.”
The fallen FTX founder, whose catastrophic downfall in late 2022 came soon after he was positioned as the world’s youngest self-made billionaire, faced a maximum of 110 years in prison.
He hung his head and looked somber as he learned his fate, showing little emotion as U.S. marshals escorted him out of the courtroom wearing tan-colored prison wear and shackles minutes later. He’s been incarcerated at Brooklyn’s federal jail since Kaplan revoked his $100 bond last August.
Kaplan announced the sentence after hearing from Bankman-Fried, his lawyers, the government and one of more than 200 victims who contacted him before the proceeding.
“A lot of crying, sleepless nights. I have a baby son and another toddler,” Sunil Kavuri, who traveled from London for the hearing, said, noting he was among countless FTX investors whose dreams were “destroyed” after losing everything.
“I suffered every day, every week for the past few years,” he said.
A jury in November found the 32-year-old from Palo Alto, California, guilty of wire fraud, money laundering conspiracy, and related counts for siphoning more than $10 billion from customers of his global cryptocurrency exchange, FTX, to its sister hedge fund, Alameda Research, using it in part to splurge on Caribbean real estate and to influence crypto legislation in Washington.
Prosecutors on Thursday said his illegal campaign contributions to Democrats and Republicans, totaling tens of millions of dollars, represented the largest election crime in the nation’s history.
Jurors heard that as he rose to fame, the California native stole billions financially ruined hundreds of thousands of people, many who were not of means. Among the A-list celebrities to endorse FTX as the “safest and easiest way to buy and sell crypto” were supermodel Gisele Bundchen, comedian Larry David, and sports stars Tom Brady, Shaquille O’Neal, Steph Curry and Naomi Osaka.
In a 20-minute, sometimes rambling statement to the court, Bankman-Fried said he agreed with “most” of what Kavuri said and recognized he had put his victims through the hell of losing all their money and the gains they’d believed they made through his trading platform.
“And what matters also is the colleagues I had at FTX, who poured themselves into the company for years and then watched me throw away everything they had built. I know a lot of people felt very let down and they were very let down. I’m sorry about that. I’m sorry about what happened at every stage. Things I should have done and said and things I shouldn’t have. At the end of the day, I failed everyone I care about and everything,” he said.
“It’s been excruciating to watch all of this unfold in slow motion. Customers don’t deserve any of that pain, and I, I was — I was the CEO of FTX … That means that I was responsible for what happened to it, at the end of the day.”
The feds had asked Kaplan to sentence Bankman-Fried to 40 to 50 years, while probation officials had recommended 100.
Assistant U.S Attorney Nicolas Roos told the court Bankman-Fried wasn’t a monster, but greedy and “someone who committed gravely serious crimes that affected hundreds of thousands or more” around the world “in indescribable ways.”
“There’s a real possibility that given the opportunity, (he’d) consider doing it again,” Roos said.
In a statement, Manhattan U.S. Attorney Damian Williams said Bankman-Fried’s “deliberate and ongoing lies demonstrated a brazen disregard for customers’ expectations and disrespect for the rule of law, all so that he could secretly use his customers’ money to expand his own power and influence.”
“The scale of his crimes is measured not just by the amount of money that was stolen, but by the extraordinary harm caused to victims, who in some cases had their life savings wiped out overnight,” Williams said.
Kaplan said his decision did not mean to undermine the brazenness of his crimes and apparent lack of remorse. In fact, Kaplan determined Bankman-Fried had perjured himself three times when he took the stand at the monthlong trial.
Kaplan said, “In the head of this mathematical wizard,” Bankman-Fried weighed the cost of getting caught in his fraud against the gain of getting away without getting caught.
“He knew it was wrong, he knew it was criminal,” the judge said. “There is absolutely no doubt that Mr. Bankman-Fried’s name right now is pretty much mud around the world.”
In requesting a lenient term, the fallen founder’s lawyer Marc Mukasey said prosecutors had compared him to some “truly vile defendants,” “stone cold financial assassins” who targeted innocent people.
“Sam was not a ruthless financial serial killer who set out every morning to hurt people,” the lawyer said. “Really he’s an awkward math nerd. He thinks in probabilities about everything,” loves veganism and children, and has “a completely, off-the-charts, mind blowing intellect.”
“Sam has lost everything. Losing the people in your life and being publicly shamed by the entire globe — to me — seems like enough deterrence,” Mukasey later added.
The judge recommended that Bankman-Fried serve his term as close as possible to the San Francisco Bay Area, where he would be close to family and at a facility where his autism needs would be accommodated and he would not be in danger as a high-profile defendant.
“We are heartbroken and will continue to fight for our son,” Bankman-Fried’s parents, Barbara Fried and Joe Bankman, both law professors at Stanford, said in a statement after the hearing.
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