Sam Bankman-Fried Sentenced to 25 Years Over FTX Crypto Fraud

Sam Bankman-Fried, the once-celebrated founder of FTX, was sentenced Thursday to 25 years in prison for defrauding his customers, investors, and lenders. The conviction comes after the dramatic collapse of FTX.

In a federal courtroom in lower Manhattan, U.S. District Judge Lewis Kaplan didn’t mince words. Dissecting the defense’s arguments as “misleading” and “logically flawed,” Kaplan emphasized Bankman-Fried’s acts of obstructing justice and tampering with witnesses. Such actions, he noted, were pivotal in deciding the hefty sentence.

The case centered around the misuse of FTX customer deposits, which Bankman-Fried diverted to cover losses at his hedge fund, Alameda Research, among other personal expenditures. Kaplan detailed the financial toll of Bankman-Fried’s actions: $8 billion lost by FTX customers, $1.7 billion by equity investors, and $1.3 billion by Alameda Research lenders.

Prosecutors had sought a sentence ranging from 40 to 50 years, citing the extensive damage caused by Bankman-Fried’s fraudulent activities. In contrast, his defense suggested a more lenient sentence of five to six-and-a-half years.

Following the sentencing, Manhattan U.S. Attorney Damian Williams stated, “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 his 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,” Williams said.

Bankman-Fried, 32, was convicted in November on two counts of wire fraud conspiracy, two counts of wire fraud and one count of conspiracy to commit money laundering, following the collapse of his crypto empire FTX in November 2022. He was also convicted of conspiracy to commit commodities fraud and conspiracy to commit securities fraud.