FTX founder Sam Bankman-Fried sentenced to 25 years

NEW YORK — A judge on Thursday sentenced Sam Bankman-Fried, the founder of cryptocurrency exchange FTX, to 25 years in prison months after a jury convicted him of defrauding customers in what authorities have called one of the largest financial frauds in history.

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In November, jurors found Bankman-Fried guilty of seven charges of fraud and conspiracy for a scheme that swindled customers out of at least $10 billion, court records show. The funds were used to make political contributions, repay loans owed by Alameda Research — a cryptocurrency hedge fund he’d founded — and for his own personal use.

Bankman-Fried, 32, is appealing his conviction.

Judge hands down 25-year sentence for Bankman-Fried

Update 11:55 a.m. EDT March 28: Judge Lewis Kaplan sentenced Bankman-Fried to 25 years during a hearing in a federal courthouse on Thursday, The New York Times reported.

The sentence fell short of the minimum 40-year sentence sought by prosecutors. Bankman-Fried’s attorneys had asked he be sentenced to no more than six and a half years.

Addressing the court before hearing his sentence Thursday, Bankman-Fried apologized, saying, “A lot of people feel really let down, and they were very let down,” CNN reported.

“I am sorry about what happened at every stage. And there are things I should’ve done and things I shouldn’t have,” he said, according to CNN, adding that the collapse of FTX “haunts me every day.”

“My useful life is probably over. It’s been over for a while now,” he said.

Original report: Prosecutors asked a judge to impose a sentence between 40 and 50 years, calling it appropriate considering the scope of the scheme. They said such a sentence would also prevent Bankmen-Fried from committing fraud again and send a “powerful signal to others who might be tempted to engage in financial misconduct that the consequences will be severe.”

“The nature and circumstances of the defendant’s crime are extraordinarily serious,” prosecutors wrote earlier this month in a court filing. “Bankman-Fried implemented, perpetuated, and concealed a multi-billion-dollar fraud scheme that victimized tens of thousands of victims—a fraud in which FTX’s customers and investors, and Alameda’s lenders suffered actual losses of at least $10 billion.”

Attorneys for Bankman-Fried argued that the government’s recommendation “adopts a medieval view of punishment” and “amounts to a death-in-prison sentencing recommendation.” They noted that their client was “deeply, deeply sorry … for the pain he caused over the last two years,” pointed to his charitable work and urged a judge to give him a sentence of no more than six and a half years.

“A sentence of decades-long duration would end Sam’s ability to lead a meaningful life and contribute to the neediest in society and would be greater than necessary,” they wrote last month in a court filing. They later added, “A sentence that returns Sam promptly to a productive role in society would be sufficient, but not greater than necessary, to comply with the purposes of sentencing.”

He could face a maximum sentence that amounts to life in prison, authorities said.

Bankman-Fried started FTX in 2019 with a fellow graduate from the Massachusetts Institute of Technology, The Wall Street Journal reported. The company quickly gained traction, attracting millions of customers, helped by star-studded advertisements and the growing popularity of crypto trading, according to the newspaper. In 2021, the company was valued at $25 billion, getting Bankmen-Fried onto the Forbes billionaires list, Reuters reported.

The company collapsed in 2022 as Bankman-Fried tried to fill holes in Alameda’s balance sheet with funds from FTX customers, according to The Associated Press.

Three people in Bankman-Fried’s inner circle also pleaded guilty to charges connected with the case.

Gary Wang, who co-founded FTX with Bankman-Fried, and Caroline Ellison, who served as CEO of Alameda Research, earlier pleaded guilty to fraud charges connected with the case. A third top FTX executive, Nishad Singh, later pleaded guilty to charges as well, The New York Times reported.

The three agreed to work with prosecutors and testified at Bankman-Fried’s trial, according to the AP.

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