Sam Bankman-Fried, the disgraced cryptocurrency magnate who committed one of the largest financial frauds in history, has been sentenced to 25 years in prison and ordered to forfeit $11 billion in assets. His lawyer reiterated his promise to appeal the verdict the same day.
The judge, Lewis Kaplan, handed down the sentence Thursday in a Manhattan courtroom. Bankman-Fried, the former CEO of the now bankrupt cryptocurrency exchange FTX, was convicted late last year of fraud and conspiracy to launder money.
Bankman-Fried appeared in court around 9:40 a.m. and took his seat in khaki prison garb, his hair having grown back into the messy style he was known for as a crypto billionaire. He showed little reaction when Kaplan read his sentence.
During sentencing, Kaplan described Bankman-Fried as a calculating mathematical genius who sought power and influence while knowingly committing misconduct. Although Bankman-Fried apologized for FTX’s fall, saying he had “made a series of bad decisions,” Kaplan stated that there was “never a word of regret” for his crimes.
“He knew it was wrong, he knew it was criminal,” Kaplan said.
The hearing began with Kaplan rejecting several defense arguments about sentencing guidelines, stating that Bankman-Fried committed perjury multiple times during his trial testimony. Kaplan likened the defense’s claim that customers can be refunded to a situation where a thief takes his loot to Las Vegas and then asks for leniency if he can return with the winnings.
Before Kaplan read his decision, Bankman-Fried, his attorney and the federal prosecutor all made statements.
Bankman-Fried issued an apology of sorts, blaming the crisis at FTX on mismanagement and saying he was “sorry for what happened.” He praised his former employees and executives, including co-founder Gary Wang and his ex-girlfriend Caroline Ellison – both of whom testified against him in the trial. Bankman-Fried claimed he wished he could help return customers’ money but acknowledged he was no longer in a position of power.
“My useful life is probably over,” Bankman-Fried said.
Marc Mukasey, Bankman-Fried’s lawyer, tried to portray the former crypto magnate as a sensitive and kind-hearted person who made mistakes. He described Bankman-Fried as “a clumsy math nerd” who loved animals, video games and “lives to give to others.” Mukasey also cited Bankman-Fried’s social awkwardness and depression as reasons why he is misunderstood, likening him to “a beautiful puzzle”.
“Sam Bankman-Fried does not make decisions with malice in his heart. He makes decisions with math in his head,” Mukasey said.
Neither appeal seemed to hold water with Kaplan, who stated that while he took into account that Bankman-Fried has autism and is socially awkward, he had committed a very serious crime. Kaplan described Bankman-Fried as coming from “an exceptionally privileged background,” referring to the parents of his law professors watching in the courtroom, and used his intellect to calculate the likelihood that he could get away with his crimes.
Kaplan cited Bankman-Fried’s testimony during his criminal trial as evidence that the former billionaire had no intention of taking responsibility for his crimes. He said he was “evasive” and “splitting hairs” while lying about his behavior.
“I’ve never seen a performance like this,” Kaplan said, adding that he saw a risk that Bankman-Fried would commit more misconduct in the future if he were able to do so.
Prosecutors had sought a sentence of between 40 and 50 years, arguing that Bankman-Fried, 32, showed a lack of remorse for his crimes while living a life of “unparalleled greed and hubris.” In a statement after the sentencing, federal prosecutor Damian Williams said Bankman-Fried’s sentence sent “an important message” and would “prevent the defendant from ever committing fraud again.”
In pre-sentencing arguments filed last month, Bankman-Fried’s attorney urged the judge to show leniency, saying his client’s maximum potential sentence of 100 years was “grotesque.” Bankman-Fried’s lawyers asked for a prison sentence of about seven years.
Kaplan recommended sending Bankman-Fried to a medium- or low-security prison in the Bay Area so family visits could be possible.
The fall of Bankman-Fried from crypto magnate to pariah
Just two years ago, Bankman-Fried was on the cusp of becoming one of the most financially and politically influential people in the US. His firm FTX was valued at $32 billion, and he had become the public face of the cryptocurrency industry, appearing on stage at events with celebrities and former world leaders and testifying before the US Congress. He was an important political donorpouring money into election campaigns and lobbying lawmakers on crypto regulation.
The descent from crypto golden boy to global pariah happened quickly. After messages appeared in November 2022 that exposes financial instability of Bankman-Fried’s companies, there was a domino effect on those companies, including customers making a bank-like run on deposits and researchers freezing FTX deposits. FTX declared bankruptcy just nine days after the initial report from crypto news site Coindesk, and Bankman-Fried’s personal wealth dropped by billions of dollars.
Weeks later, he was arrested in the Bahamas, where he and other FTX executives lived and parts of his company were based.
The long-awaited trial of Bankman-Fried began in October, with prosecutors alleging he embezzled from clients while enriching himself and buying up lavish real estate. Once known for his unkempt hair and wearing casual clothes to all occasions, Bankman-Fried appeared with a new haircut and suit when he stood trial. In an unusual and ultimately disastrous move, he decided to do just that taking the stand in defense of oneself – which led to a damaging cross-examination where he had no recollection of events and appeared to contradict himself.
Many of Bankman-Fried’s top executives and close allies, including his girlfriend Caroline Ellison, all testified against him at the trial. Ellison, the former CEO of FTX’s trading arm Alameda Research, told the court that Bankman-Fried instructed her to commit fraud and use FTX customer funds without their knowledge.
The jury in the Bankman-Fried trial found him guilty of all seven counts of fraud and conspiracy after just four hours of deliberation. Bankman-Fried has maintained his innocence.
Timeline The rise and fall of Sam Bankman-Fried
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May 2019
FTX founded
Sam Bankman-Fried, together with former Google employee Gary Wang, founded the crypto exchange FTX. Bankman-Fried is in her twenties and has just left the trading firm Jane Street Capital.
November 2019
FTX receives an investment of $100 million
Cryptocurrency exchange Binance’s then-CEO Changpeng Zhao is investing $100 million in FTX in exchange for 20% of the company.
September 2021
Bankman-Fried and FTX move to the Bahamas
Bankman-Fried will move the company’s headquarters from Hong Kong to the Bahamas in 2021, buy millions in real estate and set up shop in the country.
August 2021
Partnerships and major investments
Bankman-Fried and FTX close a deal for the company’s first major partnership, reaching a sponsorship deal with Mercedes’ Formula 1 racing team. Meanwhile, FTX is raising hundreds of millions in a funding round and is valued at $25 billion.
January 2022
FTX’s valuation rises to $32 billion
Bankman-Fried raises $400 million in a Series C funding round as the company’s valuation rises to $32 billion.
February 2022
FTX launches Super Bowl ad
Bankman-Fried is pouring millions of dollars into a Super Bowl ad with Larry David, while FTX is making a bid for the mainstream.
April 2022
Crypto Bahamas puts SBF in the spotlight
FTX is hosting an event called Crypto Bahamas, featuring celebrities like Gisele Bündchen and Tom Brady. Bankman-Fried appears on stage with former world leaders Bill Clinton and Tony Blair.
October 2022
Sam Bankman-Fried the campaign donor
Bankman-Fried is pouring about $40 million into supporting various political campaigns, becoming an emerging power player in Washington.
November 2022
Reports are emerging about FTX’s shaky finances
Cryptocurrency news site CoinDesk publishes a story showing that FTX’s finances may be shakier than previously known, leading to a wave of media attention and investor concern. A customer running on deposits leads to a crisis on the stock market.
November 2022
Bankman-Fried resigns and FTX goes bankrupt
Bankman-Fried resigns after a week of chaos and missing funds.
November 2022
Bankman-Fried arrested
Authorities arrest Bankman-Fried in the Bahamas and he is extradited to the US. He is charged with conspiracy and fraud.
August 2023
Bail revoked, sent to jail
Bankman-Fried’s bail is revoked after the diary of his former FTX director Caroline Ellison is leaked to the New York Times. He is sent to prison awaiting trial.
October 2023
The process begins
The criminal trial begins in Manhattan federal court, where former close allies and FTX executives testify against Bankman-Fried.
November 2023
Bankman-Fried found guilty
A jury finds Bankman-Fried guilty of all seven counts of conspiracy and bank fraud. He faces decades in prison.
March 28, 2024
Bankman-Fried sentenced to 25 years
In Manhattan federal court, Sam Bankman-Fried was sentenced to 25 years in prison and ordered to forfeit $11 billion in assets