Sam Bankman-Fried, FTX co-founder who presided over the biggest cryptocurrency collapse in history, will serve 25 years in prison He is convicted of fraud

Sam Bankman-Fried, co-founder of FTX, will serve a 25-year prison sentence after being convicted of defrauding his clients, investors and lenders.

The man who presided over the largest cryptocurrency collapse in history received his sentence in a Manhattan federal court by U.S. Judge Lewis Kaplan, who presided over Bankman-Fried’s trial last fall. He faced up to 110 years in prison. Prosecutors argued for a sentence of 40 to 50 years, while Mr. Bankman-Fried’s lawyers asked for a sentence of six and a half years. Sentences for white-collar crimes have varied in recent years, from 150 years for Bernard Madoff to 11 years for Elizabeth Holmes.

In his closing statement to the judge, Mr. Bankman-Fried, 32, said what happened at FTX “haunted me” and “I had made a lot of mistakes“.As CEO, “I was responsible at the end of the day“.

Mr. Bankman-Fried’s defense lawyer tried to distinguish his client from Mr. Madoff, who set up the largest Ponzi scheme in history. “Madoff stole from Holocaust survivors“, his lawyer said. “He’s not Sam. He didn’t want to personally inflict pain on anyone in any way. Sam was not a ruthless financial serial killer. He was not a predator. He makes his decisions with mathematics in mind, not malice“.

Dozens of FTX victims, including those who said they lost their life savings to the cryptocurrency exchange’s demise, sent letters asking Mr. Kaplan to impose a harsh sentence.

Federal sentencing guidelines, while advisory rather than mandatory, suggest prison time enhancements that lengthen sentences as victims’ losses mount. Mr. Kaplan had to weigh the billions that prosecutors say Bankman-Fried stole from FTX customers against FTX’s claims that injured parties could be fully reimbursed following FTX’s bankruptcy.

In January, lawyers for the defunct exchange told a Delaware bankruptcy judge that a plan to fully repay FTX’s customers and general unsecured creditors was “ hand door“. But the judge was not kind to this assertion, which he described as “misleading” and of “speculative“.

Mr. Kaplan also had harsh words for Mr. Bankman-Fried before handing down his sentence, citing “effrontery“of his actions, his”exceptional flexibility with the truth” And “his apparent lack of any remorse“.”He knew it was wrong“, added the judge.

A rise and a fall

Mr. Bankman-Fried’s conviction marks the end of a spectacular fall for a former billionaire who ran the world’s second-largest cryptocurrency exchange and spearheaded the digital assets boom in the early years of the pandemic. His empire imploded in late 2022 when FTX filed for bankruptcy and was arrested by authorities in the Bahamas.

His trial last fall captivated the financial world. A 12-person jury ultimately sided with prosecutors who argued that Bankman-Fried deliberately stole up to $14 billion in customer deposits from his cryptocurrency exchange in a scheme that he had implemented with three of his senior executives.

According to prosecutors, the group allowed Alameda Research, Mr. Bankman-Fried’s cryptocurrency trading firm, to access “secretly“to FTX customer deposits, then spent the money on investments, loan repayments, political donations, and real estate.”He spent his clients’ money and lied to them about it“, declared prosecutor Nicolas Roos during the government’s final argument.

The three other FTX executives – Caroline Ellison, CEO of Alameda, Gary Wang, co-founder of FTX, and Nishad Singh, CTO of FTX – pleaded guilty to fraud charges and testified against Bankman-Fried in connection with agreements concluded with the government. They should be sentenced sometime in 2024.

Mr Bankman-Fried said poor business decisions and management errors – not fraud – were to blame for the collapse of his cryptocurrency exchange. “Have you defrauded anyone?” asked Bankman-Fried’s lawyer, Mark Cohen, during the accused’s risky gamble to take the stand in the final days of the trial. “No, I didn’t“, replied Mr. Bankman-Fried.

The conviction ends all criminal cases against Bankman-Fried. Prosecutors have declined to pursue another set of charges that Bankman-Fried committed bank fraud and bribed Chinese officials. Bankman-Fried can, however, still appeal his conviction and sentence.

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