Former crypto entrepreneur Sam Bankman-Fried was sentenced Thursday (Mar. 28) to 25 years in prison for a massive fraud on hundreds of thousands of customers that unravelled with the collapse of FTX, once one of the world’s most popular platforms for exchanging digital currency.
The sentence was half of what prosecutors sought and less than a quarter of the 105 years recommended by the court’s probation officers.
Bankman-Fried was convicted in November of fraud and conspiracy — a dramatic fall from a crest of success that included testimony before Congress and celebrity endorsements.
Kaplan imposed the sentence in the same Manhattan courtroom where, four months previously, Bankman-Fried testified that he had intended to revolutionize the emerging cryptocurrency market with his innovative and altruistic ideas, not steal.
The judge said Bankman-Fried repeatedly committed perjury on the witness stand in testimony that was “often evasive, hair-splitting, dodging questions.”
Kaplan said the sentence reflected the risk that Bankman-Fried “will be in position to do something very bad in the future. And it’s not a trivial risk at all.” He added that the sentence was fashioned “for the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”
Kaplan said he would advise the Federal Bureau of Prisons to send Bankman-Fried to a medium-security prison near San Francisco because his notoriety, his association with vast wealth, his autism and his social awkwardness are likely to make him especially vulnerable at a high-security facility.
He ordered Bankman-Fried to pay $11 billion in forfeiture to the US government.
The 32-year-old California man apologized in a rambling statement.
Wearing his khaki-colored prison uniform and chained at the ankles, he seemed to briefly get emotional as he spoke for about 20 minutes, expressing regret about “a lot of mistakes” but casting some blame onto others. His trademark messy and bushy hair had returned from the trimmer look he displayed at trial.
Bankman-Fried’s attorneys, friends and family had urged leniency, saying he was unlikely to re-offend. They also said FTX’s investors have largely recovered their funds — a claim disputed by bankruptcy lawyers, FTX and its creditors.
Prosecutors said tens of thousands of people and companies worldwide lost billions of dollars since 2017 after Bankman-Fried looted his FTX customer accounts that he promised were safe to make illegal political donations, bribes, make risky investments, buy luxury real estate in the Caribbean and live lavishly.
FTX let investors buy dozens of virtual currencies, from Bitcoin to more obscure ones like Shiba Inu Coin. Flush with billions of dollars of investors’ cash, Bankman-Fried took out a Super Bowl advertisement to promote his business and bought the naming rights to an arena in Miami.
But the collapse of cryptocurrency prices in 2022 took its toll on FTX, ultimately leading to its downfall. FTX’s hedge fund affiliate, Alameda Research, had bought billions of dollars of various crypto investments that lost considerable amounts of value in 2022. Bankman-Fried tried to plug the holes in Alameda’s balance sheet with FTX customer funds.
Three people from Bankman-Fried’s inner circle pleaded guilty to related crimes and testified at his trial.
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