Sam Bankman-Fried sentenced to 25 years' jail for FTX fraud

He "orchestrated one of the largest financial frauds in history".

Keyla Supharta | March 29, 2024, 12:08 PM



Sam Bankman-Fried was sentenced to 25 years in prison on Thursday (Mar. 28) for defrauding his customers and investors, which led to the downfall of FTX, the cryptocurrency exchange he founded, CNBC reported.

Federal prosecutors had initially sought a 40- to 50-year prison term, while Bankman-Fried's attorney had suggested a sentence of five to six and a half years.

The 32-year-old co-founder of the now-bankrupt FTX was found guilty on seven counts of wire fraud and conspiracy to launder money last year, and had stolen US$8 billion (S$10.8 billion) from FTX customers.

Lack of real remorse

When handing down his judgment, Judge Lewis Kaplan said that Bankman-Fried knew that his actions were wrong and were criminal, yet he showed a "lack of any real remorse", Financial Times reported.

Kaplan added that Bankman-Fried “regrets that he made a very bad bet on the likelihood of getting caught, but he is not going to admit a thing".

The judge also said that Bankman-Fried attempted to tamper with a witness and lied on multiple occasions while testifying at trial.

Kaplan added that there is a risk that Bankman-Fried "will be in position to do something bad in the future", reported CNN.

On top of his 25-year jail term, Bankman-Fried was also ordered to pay US$11 billion (S$14.9 billion) in forfeiture to the U.S. government.

Not fraud but "liquidity crisis" or "mismanagement"

Before being sentenced, Bankman-Fried suggested that the billions customers lost was not due to fraud, but a result of a "liquidity crisis" or "mismanagement".

“It’s been excruciating to watch this all unfold,” the 32-year-old told Kaplan, as quoted by CNBC. “Customers don’t deserve this level of pain.”

Bankman-Fried also said that he was sorry to have let down a lot of people and that he was "sorry about what happened at every stage".

“I was the CEO of FTX and I was responsible.”

While Bankman-Fried acknowledged some degree of culpability, he insinuated that customers would eventually recover the money they placed with his exchange.

He also blamed a federal bankruptcy court for not making those customers whole yet, wrote CNBC.

Theft of billions of dollars

Assistant U.S. Attorney Nicolas Roos, who pushed for a prison sentence of up to 50 years, maintained that FTX's collapse in late 2022 was not due to a "liquidity crisis or act of mismanagement".

It was a "theft" of billions of dollars of customer money around the world, Roos said.

Meanwhile, Bankman-Fried's lawyer Marc Mukasey said that Sam is not a "ruthless financial serial killer" who sets out every morning to hurt people.

Instead, Mukasey compared the FTX co-founder to a "beautiful puzzle" who should not be confined within the walls of prison.

One of the largest financial frauds in history

In a statement after Bankman-Fried's sentencing, Manhattan U.S. Attorney Damian Williams said that the 32-year-old "orchestrated one of the largest financial frauds in history".

“His deliberate and ongoing lies demonstrated a brazen disregard for his 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."

Will appeal sentence

Joseph Bankman and Barbara Fried, parents of the FTX co-founder and Stanford Law professors, were sitting in the first row of the courtroom gallery during their son's sentencing.

In a statement, they said that they were "heartbroken and will continue to fight for our son".

Bankman-Fried plans to appeal his conviction and sentence, according to The Guardian.

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Top image via 60 Minutes/YouTube.