On Thursday, Crypto entrepreneur Sam Bankman-Fried, once at the top of the cryptocurrency universe, was sentenced to 25 years in prison for a massive fraud involving over $11 billion. He was convicted in November on charges of fraud and conspiracy, a dramatic fall from his previous success that included a Super Bowl advertisement and endorsements from celebrities like Tom Brady and Stephen Curry.
U.S. District Judge Lewis A. Kaplan delivered a scathing analysis of Bankman-Fried and his crimes, noting that he had repeatedly committed perjury and showed no remorse for his actions. The judge also expressed concern that Bankman-Fried could potentially cause further harm in the future. As a result, he imposed a sentence of 25 years, less than the 40-50 years recommended by prosecutors.
Bankman-Fried, wearing a khaki-colored prison uniform and chained at the ankles, apologized in a rambling statement, but also placed some blame on others. His defense attorney argued for a single-digit prison sentence, stating that his client’s actions were driven by his math-focused decision-making rather than malice.
The judge also ordered Bankman-Fried to forfeit over $11 billion, with customers losing $8 billion, investors losing $1.7 billion, and lenders losing $1.3 billion. However, Bankman-Fried’s attorneys, friends, and family argued for leniency, claiming that he was unlikely to re-offend and that FTX’s investors have largely recovered their funds.
FTX, once the second-largest cryptocurrency exchange in the world, collapsed in 2022 due to the declining values of various crypto investments. Bankman-Fried’s hedge fund affiliate, Alameda Research, suffered significant losses and he attempted to use FTX customer funds to cover the losses. Three individuals from Bankman-Fried’s inner circle have pleaded guilty to related crimes and testified against him.
In the end, Bankman-Fried’s parents, both Stanford Law School professors, issued a statement expressing their heartbreak and continued support for their son. The judge recommended that Bankman-Fried be sent to a medium-security prison near San Francisco due to his notoriety, wealth, autism, and social awkwardness.
