Disgraced cryptocurrency conman Sam Bankman-Fried was sentenced Thursday to 25 years in prison for orchestrating one of the biggest financial fraud schemes in American history.
Manhattan Judge Lewis Kaplan handed down Bankman-Fried’s sentence for stealing over $8 billion of customer funds from bankrupt crypto exchange FTX. Federal prosecutors sought at least 40 years in prison for Bankman-Fried for perpetrating the FTX scam against the company’s customers and investors, and investors in sister hedge fund Alameda research.
“They built something really beautiful and I threw all of that away,” Bankman-Fried said of his co-workers at FTX, CNBC reported. “It haunts me every day.”
The defendant’s attorneys asked for a five-to-six-year sentence, citing their client’s autism as an extenuating circumstance. They also noted FTX customers will likely get their money back from bankruptcy proceedings and claimed Bankman-Fried is a first-time criminal offender.
“Samuel Bankman-Fried orchestrated one of the largest financial frauds in history, stealing over $8 billion of his customers’ money. His deliberate and ongoing lies demonstrated a brazen disregard for 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,” U.S. Attorney for the Southern District of New York Damian Williams said in a statement.
“Today’s sentence will prevent the defendant from ever again committing fraud and is an important message to others who might be tempted to engage in financial crimes that justice will be swift, and the consequences will be severe.”
“There are serious consequences for defrauding customers and investors,” said Attorney General Merrick Garland. “Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice.”
Bankman-Fried is expected to appeal his conviction and sentence.
Before his conviction, Bankman-Fried’s bail was revoked for witness tampering after he allegedly leaked former lover and business partner Caroline Ellison’s private journal to The New York Times. Ellison, the former CEO of Alameda, was a star witness at trial and testified against Bankman-Fried.
Bankman-Fried was convicted on seven criminal fraud counts last year after a month-long trial where prosecutors argued that he misused customer funds to cover losses at Alameda research and fund his lavish spending spree. He paid exorbitant sums of money on private investments, real estate, political donations and access to top-tier celebrities, prosecutors noted in their sentencing memo earlier this month.
Prosecutors dropped campaign-finance charges against Bankman-Fried because of issues surrounding his extradition from the Bahamas, where he lived in a $30 million penthouse prior to FTX unraveling. Bankman-Fried orchestrated a straw donor scheme to fund political candidates from both parties with former FTX executives Nishad Singh and Ryan Salame, according to federal prosecutors.
Last midterm cycle, Bankman-Fried donated nearly $40 million in his name to Democrats, according to watchdog Open Secrets. Salame gave about $23 million to Republicans and Singh gave $8 million to Democrats in the 2022 election cycle. The large political donations allowed Bankman-Fried to build influence among Washington, D.C., policymakers and push for his preferred version of crypto regulations.
In November 2022, the theft of customer funds from FTX exploded into public view, and shortly thereafter, Bankman-Fried’s crypto empire collapsed. At one point, Forbes measured his net worth at $26.5 billion from his FTX ownership stake and investments in the FTT crypto token. FTX and its U.S. operations were valued at roughly $40 billion combined.
The son of two Stanford professors, Joseph Bankman and Barbara Fried, Bankman-Fried grew up in a middle-class household and graduated from the Massachusetts Institute of Technology.
“We are heartbroken and will continue to fight for our son,” the Bankman-Fried family said in a statement. Both of his parents were present at the courtroom.
Following a stint at global trading firm Jane Street Capital, Bankman-Fried launched Alameda and began trading cryptocurrency. In 2019, he founded FTX and quickly became a star in cryptocurrency world as he developed his public persona and FTX soared in valuation.
Celebrities such as retired NFL quarter Tom Brady, supermodel Gisele Bundchen, investor and TV personality Kevin O’Leary, and NBA legend Shaquille O’Neal became associated with FTX. A major aspect of Bankman-Fried’s public persona was his association with the effective-altruism movement, a self-styled philosophical framework professing to add empirical and long term insights to charitable giving.