Chelsea Jia Feng/BI
- Sam Bankman-Fried has been sentenced to 25 years in prison.
- A jury convicted him of seven criminal counts, finding him guilty of fraud and money laundering.
- Bankman-Fried expressed regret at the hearing — but still tried to shift blame.
Sam Bankman-Fried, the disgraced cryptocurrency mogul, has finally learned his fate.
US District Judge Lewis Kaplan sentenced Bankman-Fried Thursday to 25 years in prison.
The judge also ordered over $11 billion in forfeiture, which includes the properties and assets Bankman-Fried purchased through customer funds. The payments to victims, Kaplan said, should be handled through the Justice Department.
In his sentencing, Kaplan described Bankman-Fried as ambitious and deceitful, willing to gamble with his customers' livelihoods.
"He knew it was wrong. He knew it was criminal," Kaplan said as Bankman-Fried slumped in his chair. "He regrets making a very bad bet about the likelihood of getting caught."
Bankman-Fried, his eyes red, addressed the court ahead of his sentencing Thursday. He expressed regret for letting down customers and employees of FTX, his cryptocurrency exchange.
"My useful life is probably over," he said. "It has been over for a while."
At the same time, he insisted it should not have gone bankrupt — claiming that the month the exchange collapsed would be "difficult" no matter what, but that everyone could have been repaid "with interest"
Bankman-Fried's newly hired legal team, which said it would appeal his conviction, had asked for a sentence of 6.5 years.
Thursday's sentencing in Manhattan federal court followed a verdict where jurors found the 32-year-old guilty on seven counts of wire fraud, money laundering, and conspiracy charges in November after a six-week criminal trial.
Bankman-Fried faced a maximum of 110 years in prison following the collapse of FTX, his cryptocurrency exchange, where he was the CEO and cofounder. Prosecutors had asked for a sentence of between 40 and 50 years behind bars, comparing him to the Ponzi fraudster Bernie Madoff.
Federal prosecutors argued that Bankman-Fried and his inner circle of executives funneled customer funds to themselves by commingling money with Alameda Research, Bankman-Fried's hedge fund, amounting to an $11 billion fraud scheme. They used those funds for advertising, tech investments, luxurious real estate in the Bahamas, and political donations to gain influence in Washington, DC. At the same time, Bankman-Fried and other executives lied to investors and lenders of FTX and Alameda Research about the truth of the company's finances.
The sentencing took place in the same 26th-floor courtroom as the trial in a lower Manhattan courthouse. The sky, a stark white, threatened to rain. Clouds wrapped themselves around nearby skyscrapers. Bankman-Fried, clad in a standard-issue taupe tunic over a gray T-shirt, and with substantial hair volume, walked into the room in the custody of US Marshals with his hands behind his back and chains clanking between his ankles.
When his attorney, Marc Mukasey, described his devotion to others and struggles with depression manifested by an "aching hole in his brain where happiness should be," Bankman-Fried blinked rapidly, appearing to fight back tears and later wiping his face.
Mukasey said Bankman-Fried could not be understood "through the lens of human behavior," referring to his autism diagnosis.
"Sam Bankman-Fried doesn't make decisions with his heart," Mukasey said. "He makes decisions with math in his brain."
Before announcing Bankman-Fried's sentence, Kaplan said he believed he perjured himself when he testified, lying about when he became aware of Alameda's liability to FTX customers.
The judge said that he wanted to prevent Bankman-Fried from committing more harm.
"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," he said.
Shortly after FTX collapsed in November of 2022, other executives of his companies — including Caroline Ellison, Gary Wang, and Nishad Singh — quickly began cooperating with federal prosecutors in Manhattan, sealing Bankman-Fried's fate. They all pleaded guilty to fraud charges and testified against him at trial, each explaining the inner workings of their scheme.
Now that Bankman-Fried's sentencing is over, Kaplan, the judge, will likely swiftly order sentencing hearings for Ellison, Wang, and Singh. Prosecutors, as part of their cooperation agreement, have promised to ask the judge for light sentences.
Ryan Salame, another FTX executive, who pleaded guilty to charges against him but did not cooperate with prosecutors, has a sentencing scheduled for May 1.
During his trial, Bankman-Fried made the rare decision to take the witness stand, though it didn't appear to work in his favor.
Kaplan lost his patience with Bankman-Fried a few times, giving him terse instructions to answer questions directly. One attorney who advised his criminal defense team later said he "may be at the very top of the list as the worst person I've ever seen do a cross examination."
At Thursday's sentencing hearing, Kaplan called the testimony "hair-splitting" and "evasive" when it wasn't outright perjurous.
"I've been doing this job for 30 years. I have never seen a performance like that," Kaplan said.
Ahead of the sentencing hearing, Bankman-Fried's attorneys argued that FTX's customers didn't actually lose money, pointing to a moment in a January hearing for FTX's bankruptcy, where a lawyer said FTX customers and creditors "will eventually be paid in full."
Prosecutors — and John J. Ray III, who took over as CEO of FTX to shepherd the company through the bankruptcy process — disputed that accounting, saying the quote was taken out of context.
"The value we hope to return to creditors would not exist without the tens of thousands of hours that dedicated professionals have spent digging through the rubble of Mr. Bankman-Fried's sprawling criminal enterprise to unearth every possible dollar, token or other asset that was spent on luxury homes, private jets, overpriced speculative ventures, and otherwise lost to the four winds," Ray wrote in a court filing ahead of the sentencing.
Federal prosecutors had also initially accused Bankman-Fried of campaign finance crimes, but later withdrew the charges. Judges in the Bahamas, where Bankman-Fried was extradited from to the US, ruled that the charges were not included in the extradition treaty between the two countries.
Prosecutors asked Kaplan to consider it in his sentencing anyway, writing that there was clear evidence Bankman-Fried went on a massive political bribing spree.
"His unlawful political donations to over 300 politicians and political action groups, amounting to in excess of $100 million, is believed to be the largest-ever campaign finance offense," prosecutors wrote in their sentencing submission. "His bribe of Chinese government officials—totaling $150 million—was one of the single largest by an individual."
Kaplan did so, noting that Bankman-Fried was seeking "power and influence."
Bankman-Fried said involvement in the American political sphere was to promote responsible cryptocurrency regulation, but Kaplan noted that he criticized regulators in private messages presented at the trial.
"In my judgment, that was an act," Kaplan said. "And he admitted it."
Bankman-Fried has been incarcerated in Brooklyn's Metropolitan Detention Center since being remanded there prior to his trial.
His parents, Joseph Bankman and Barbara Fried, submitted letters pleading for a lighter sentence, arguing that Bankman-Fried is neurodivergent and his "inability to read or respond appropriately to many social cues" could put him in danger.
"We are heartbroken and will continue to fight for our son," Bankman and Fried said in a statement to Business Insider after the hearing.
Kaplan said he would recommend that the Federal Bureau of Prisons send Bankman-Fried to a facility close to the San Francisco area so his family can visit him.