Fallen ‘Crypto King’ Sam Bankman-Fried gets 25 years for fraud

International Desk

Published: March 29, 2024, 12:48 PM

Fallen ‘Crypto King’ Sam Bankman-Fried gets 25 years for fraud

Illustration: Reuters

Sam Bankman-Fried, co-founder of the failed crypto exchange FTX, has been sentenced to 25 years in prison for defrauding customers and investors of his now-bankrupt firm.

The ruling cements the downfall of the former billionaire, who emerged as a high profile champion of crypto before his firm‍‍`s dramatic collapse in 2022.

He was found to have stolen billions from customers ahead of the failure.

The 32-year-old said in court he knew "a lot of people feel really let down".

"I‍‍`m sorry about that. I‍‍`m sorry about what happened at every stage," he said, speaking quietly and clearly ahead of his sentencing.

FTX was one of the world‍‍`s largest crypto exchanges before its demise, turning Bankman-Fried into a business celebrity and attracting millions of customers who used the platform to buy and trade cryptocurrency.

Rumours of financial trouble sparked a run on deposits in 2022, precipitating the firm‍‍`s implosion and exposing Bankman-Fried‍‍`s crimes.

He was convicted by a New York jury last year on charges including wire fraud and conspiracy to commit money laundering, after a trial that detailed how he had taken more than $8bn (£6.3bn) from customers, and used the money to buy property, make political donations and put toward other investments.

Before reading the sentence on Thursday, Judge Lewis Kaplan provided a harsh assessment of Bankman-Fried‍‍`s behaviour, saying he had lied during his testimony at trial when he claimed he was unaware until the last minute that his companies were taking money entrusted to them for safe-keeping by customers and using it for other purposes.

"He knew it was wrong. He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught but he‍‍`s not going to admit a thing," the judge said.

Though Bankman-Fried had made "protestations of sorrow" about customer losses, he had uttered "never a word of remorse for the commission of terrible crimes", he added.

While 25 years constitutes a serious prison sentence, it is far less than the more than 100 years Bankman-Fried could have received under official government guidelines.

Federal prosecutors in New York this month told the judge such a long term was not necessary.

But they requested at least 40 years, arguing that Bankman-Fried had committed a massive fraud, while showing "brazen disrespect" for the law.

Bankman-Fried‍‍`s team, which is expected to appeal, had argued for a lighter sentence of roughly five to 6.5 years.

They said that he was a non-violent, first-time offender, and pointed to mental health struggles and argued that customers were poised to recover significant sums under a plan currently working through bankruptcy court.

"The victims want their money back and they should get it," his lawyer, Marc Mukasey argued in court on Thursday morning. "Sentence him to work hard and give it all away."

Former federal prosecutor Mitchell Epner, now a lawyer at Rottenberg Lipman Rich, said he was "very surprised" by the ruling, noting that Bankman-Fried could potentially be released from prison in about 13 years.

But Jennifer Taub, a law professor at Western New England University and expert on white collar crime, said she thought the length of the sentence was appropriate.

"It is the right balance between how old he is and what is the purpose of deterrence," she said.

In his sentencing remarks, Judge Kaplan said what could amount to a life sentence was unnecessary but that Bankman-Fried must receive a punishment sufficient to prevent him from committing future crimes.

"There is a risk that this man will be in a position to do something very bad in the future and it‍‍`s not a trivial risk, not a trivial risk at all," he said.


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