BREAKING: Sam Bankman-Fried sentenced to 25 years in federal prison for fraud and conspiracy
A federal judge sentenced Sam Bankman-Fried to 25 years in prison Thursday, citing the former FTX CEO’s “apparent lack of remorse,” “exceptional flexibility with the truth,” and the “brazenness” of his fraud.
The term was about half the 40-50 years prosecutors sought.
US District Court Judge Lewis Kaplan’s sentence came down five months after Bankman-Fried was convicted by a federal jury on seven counts of fraud and conspiracy in connection with the failure of FTX in November 2022.
At one time, FTX had been world’s biggest crypto exchange after Binance. Attracting top-shelf venture capitalist backers such as Sequoia Capital, FTX sported a valuation of $32 billion in early 2022.
And Bankman-Fried, now 32, courted celebrity supporters such as superstar NFL quarterback Tom Brady and plastered the FTX brand on sports arenas and bought splashy Super Bowl TV commercials.
Crypto wunderkind
The crypto wunderkind also bridged the gap with Wall Street by establishing strong ties to luminaries such as hedge fund manager and conference impresario Anthony Scaramucci.
And he contributed millions to members of Congress and political action committees to curry influence on Capitol Hill. And it didn’t hurt that his parents were prestigious law professors at Stanford.
In Bankman-Fried, finance and the political establishment finally found a face to for the freewheeling crypto industry. With his slob-chic vibe of wrinkled T-shirts and cargo shorts, Bankman-Fried cast himself as the latest boy genius to spin billions of dollars in wealth from arcane techno-finance models.
Yet prosecutors, led by Assistant US Attorney Danielle Sassoon, produced a powerful and persuasive narrative that depicted Bankman-Fried as a fraudster who deployed some of the oldest tricks in the book to fleece investors.
He comingled deposits, moved funds around arbitrarily, and did not comply with many US regulations because his companies were domiciled in Hong Kong and then the Bahamas.
Several former colleagues, including Caroline Ellison, testified that Bankman-Fried funnelled billions of dollars in deposits at FTX into his crypto investment fund, Alameda Research, to cover losses in 2022.
They also told the jury that Bankman-Fried was not the head-in-the-clouds brainiac who knew little of the daily operations of his enterprises. In contrast, he was a hands on manager who designed and used backdoors to cook the books at both FTX and Alameda.
The onetime crypto chieftain flopped when he took the stand himself. He frequently could not recall details of his tenure at FTX and Alameda. Among courtroom attendees, his “cannot recall’ riposte to prosecutors became a meme.
It took the jury just a few hours to convict Bankman-Fried of his crimes. Now he will pay back his debt to society for the next 25 years.
This is a developing story.
Aleks Gilbert is New York-based correspondent for DL News. Contact the author at [email protected].
