Samuel Bankman-Fried has to go to prison for several decades. The fallen crypto entrepreneur was sentenced to 25 years in prison by a New York judge on Thursday. He was found guilty by a jury on all seven counts in a trial in November. The maximum prison sentence for these counts combined would have been 110 years. Bankman-Fried, who is now 32 years old, testified in the trial and protested his innocence. The judge in charge, Lewis Kaplan, said at the sentencing that Bankman-Fried had repeatedly lied under oath. He justified the sentence by “the enormous harm he has caused, the audacity of his actions, his extraordinary flexibility with the truth and his apparent lack of genuine remorse.”
With his verdict, the judge moved between the ideas of the prosecution and the defense. The public prosecutor’s office had called for a prison sentence of 40 to 50 years. She said Bankman-Fried committed “one of the largest financial frauds in American history” and that he wanted to use it to make himself the “crypto king.” She compared him to Bernard Madoff, the notorious investment fraudster who was sentenced to 150 years in prison and died in prison in 2021. Bankman-Fried’s defense lawyers had argued that a possible prison sentence should be limited to six and a half years. They said the entrepreneur was not the “supervillain” he had been portrayed as. In the hope of a lenient sentence, they also pointed out that he suffered from autism.
Bankman-Fried was once considered a model entrepreneur. In 2019 he founded the crypto platform FTX and promoted it as a particularly secure investment platform. He quickly became a star in the crypto scene and surrounded himself with celebrities like Bill Clinton and Gisele Bündchen. With his fuzzy head and decidedly sloppy clothing, he was perceived as a quirky entrepreneurial genius and was widely known as just “SBF.” In early 2022, FTX reached a valuation of $32 billion at its peak.
Found guilty on all charges
But the success story came to an abrupt end when FTX had to file for bankruptcy in November 2022. Bankman-Fried was arrested in the Bahamas, where FTX is based and his personal residence, and extradited to the United States. Within weeks, a criminal lawsuit was filed against him.
The public prosecutor’s office accused him of systematically cheating since FTX was founded. He diverted billions of dollars from customers and used them for his personal purposes, such as investing it as venture capital in other companies, donating it to politicians or buying expensive real estate. One vehicle for this was the hedge fund Alameda Research, which he also founded, and to which money was funneled from FTX.
Bankman-Fried has denied intentionally cheating. He described himself as an overwhelmed entrepreneur who had made mistakes. However, his initial position in the legal dispute was made more difficult by the fact that some of his closest colleagues in the management of his companies made confessions. The jury at the November trial took just five hours to deliberate before finding him guilty on all charges.
At a hearing before the sentence was announced on Thursday, lawyers from both sides had their say. Bankman-Fried also spoke and admitted mistakes. Defense attorney Marc Mukasey said his client was “not a ruthless financial serial killer.” He added: “Sam Bankman-Fried does not make his decisions with malice in his heart. He hits them with math in his head.” Bankman-Fried is expected to appeal the ruling.
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