“I’M SORRY FOR THAT, Customers have been suffering … I didn’t at all mean to minimize that. I also think that’s something that was missing from what I’ve said over the course of this process, and I’m sorry for that.” Sam Bankman-Fried said while addressing district judge Lewis Kaplan.
Sam Bankman-Fried was sentenced to 25 years in prison by a judge on Thursday for stealing $8 billion from customers of the now-bankrupt FTX cryptocurrency exchange he founded, the last step in the former billionaire wunderkind’s dramatic downfall.
U.S. District Judge Lewis Kaplan handed down the sentence at a Manhattan court hearing after rejecting Bankman-Fried’s claim that FTX customers did not actually lose money and finding that he lied during his trial testimony. A jury found Bankman-Fried, 32, guilty on Nov. 2 on seven fraud and conspiracy counts stemming from FTX’s 2022 collapse in what prosecutors have called one of the biggest financial frauds in U.S. history.
While referring to his FTX colleagues, Bankman-Fried added, “They put a lot of themselves into it, and I threw that all away. It haunts me every day.”
Kaplan said Bankman-Fried has shown no remorse.
“He knew it was wrong,” Kaplan said. “He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right.”
Bankman-Fried, wearing a beige short-sleeve jail T-shirt, acknowledged during 20 minutes of remarks to the judge that FTX customers had suffered and he offered an apology to his former FTX colleagues – but did not admit criminal wrongdoing.
Bankman-Fried stood with his hands clasped before him as Kaplan read the sentence. He then spoke with his defense lawyer Marc Mukasey briefly before being led out of the courtroom by members of the U.S. Marshals Service.
The sentence marked the culmination of Bankman-Fried’s plunge from an ultra-wealthy entrepreneur and major political donor to the biggest trophy to date in a crackdown by U.S. authorities on malfeasance in cryptocurrency markets
“There are serious consequences for defrauding customers and investors,” U.S. Attorney General Merrick Garland said in a statement. “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.”
Kaplan found that FTX customers lost $8 billion, FTX’s equity investors lost $1.7 billion, and that lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion. He imposed an $11 billion forfeiture order and authorized the government to repay victims with seized assets.
Federal prosecutors had sought a sentence of 40 to 50 years. Mukasey had argued for a sentence of less than 5-1/4 years.
Three former close associates testified as prosecution witnesses that Bankman-Fried had directed them to use FTX customer funds to plug losses at Alameda Research. All three have pleaded guilty to fraud.
Kaplan said Bankman-Fried lied when testified that he did not know Alameda Research had spent customer deposits taken from FTX.
Mukasey sought to distance Bankman-Fried from notorious fraudsters like Bernie Madoff, saying he was “not a ruthless financial serial killer” but rather an “awkward math nerd” who tried to get customers their money back after FTX’s collapse.
“Sam Bankman-Fried doesn’t make decisions with malice in his heart,” Mukasey added. “He makes decisions with math in his head.”
Bankman-Fried’s eyes turned red as he appeared to hold back tears while Mukasey spoke.
His parents, Stanford University law professors Joseph Bankman and Barbara Fried, attended the sentencing. Bankman held a green umbrella as they exited the courthouse into a rainy New York afternoon, their arms around each other.
“We are heartbroken and will continue to fight for our son,” they said in a statement.
