Thursday, March 28, 2024 – Disgraced crypto king, Sam Bankman-Fried, has been sentenced to 25 years in prison for stealing $8 billion from customers of the now-bankrupt FTX cryptocurrency exchange he founded.
U.S. District Judge Lewis Kaplan handed down the sentence on
Thursday, March 28, at a Manhattan court hearing after rejecting
Bankman-Fried's claim that FTX customers did not actually lose money and
accusing him of lying during his trial testimony.
"He knew it was wrong," Kaplan said of
Bankman-Fried before handing down the sentence. "He knew it was criminal.
He regrets that he made a very bad bet about the likelihood of getting caught.
But he is not going to admit a thing, as is his right."
In addition to the prison sentence, Kaplan also ordered a
forfeiture of $11.2 billion. However, he said there would be no restitution
because it would be "impractical" in this case with so many victims.
At his sentencing, Bankman-Fried acknowledged during 20
minutes of remarks to the judge that FTX customers had suffered and he offered
an apology to his former FTX colleagues.
Addressing the judge, Bankman-Fried said, "Customers
have been suffering... I didn't at all mean to minimize that. I also think
that's something that was missing from what I've said over the course of this
process, and I'm sorry for that."
Referring to his FTX colleagues, Bankman-Fried told the
judge, "They put a lot of themselves into it, and I threw that all away.
It haunts me every day."
A jury found Bankman-Fried, 32, guilty on Nov. 2 on seven
fraud and conspiracy counts stemming from FTX's 2022 collapse in what
prosecutors have called one of the biggest financial frauds in U.S. history.
Bankman-Fried's cryptocurrency exchange company, FTX, went
bust in 2022 with $8billion of customer funds missing. At its peak FTX was
valued at $32billion (£26billion), and Bankman-Fried became a business
celebrity, promoting the firm and enticing millions of customers to invest.
Last November, a jury found Bankman-Fried had stolen billions of customer money
ahead of FTX’s collapse in order to buy property, and make political donations
and other investments.
Sam Bankman-Fried was born in 1992 in California to Barbara
Fried and Joseph Bankman, both professors at Stanford Law School. He attended
the Massachusetts Institute of Technology (MIT) in 2014 with a bachelor’s
degree in physics and a minor in mathematics.
He started his finance career in 2013 as an intern at Jane
Street Capital, a proprietary trading firm, trading international Exchange
Traded Funds (EFTs). In September 2017 he moved to Berkeley, California, where
he worked briefly at the Centre for Effective Altruism. By November, he
co-founded the quantitative trading firm Alameda Research alongside Tara
Hedley, after receiving funding from billionaire computer programmer Jaan
Tallinn and investor Luke Ding.
In January 2018 he organised an arbitrage trade, taking
advantage of the higher price of bitcoin in Japan compared to the US. He moved
to Hong Kong after attending a cryptocurrency conference in Macau, and by April
2019 he had founded FTX.
In 2021 Bankman-Fried was included on the 2021 Forbes 30
Under 30 list. However, after his conviction he was included in the 2023 Forbes
Hall of Shame list, featuring 10 picks the publication wished it could take
back.
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