A PYMNTS Company

Sam Bankman-Fried Gets 25-Year Sentence for $8B Crypto Fraud

 |  March 28, 2024
Sam Bankman-Fried, the once-celebrated entrepreneur behind the FTX cryptocurrency exchange, has been sentenced to 25 years in prison for orchestrating one of the largest financial frauds in US history. US District Judge Lewis Kaplan delivered the verdict on Thursday, marking the downfall of the 32-year-old former billionaire.

Bankman-Fried, who founded the now-bankrupt FTX exchange, faced charges of fraud and conspiracy related to the collapse of the platform in 2022. According to Reuters, despite his claims of innocence, a jury found him guilty on seven counts, culminating in a sentence that reflects the magnitude of the deception.

Judge Kaplan, presiding over the Manhattan court hearing, rebuffed Bankman-Fried’s defense, dismissing his assertions that FTX customers hadn’t actually suffered losses. He accused Bankman-Fried of dishonesty during the trial proceedings and emphasized the gravity of the crimes committed. “He knew it was wrong. He knew it was criminal,” Kaplan stated before announcing the sentence. “But he is not going to admit a thing, as is his right.”

Related: Bankman-Fried Prosecutors Agree To Temporarily Withdraw Some Charges

Bankman-Fried, clad in a beige short-sleeve jail t-shirt, listened solemnly as the sentence was read out. During his brief remarks to the judge, he acknowledged the harm inflicted on FTX customers and extended an apology to his former colleagues. However, the sentence underscores the severe consequences of his actions, marking a dramatic reversal of fortune for the once-prominent figure in the cryptocurrency world.

The courtroom drama represents the climax of Bankman-Fried’s precipitous fall from grace. Once lauded as an ultra-wealthy entrepreneur and influential political donor, he now stands as a symbol of the crackdown by U.S. authorities on fraudulent practices within the cryptocurrency markets. Despite his vow to appeal the conviction and sentence, the legal battle appears to be over.

Judge Kaplan’s assessment of the losses incurred by FTX customers, totaling $8 billion, underscores the scale of the fraud. Additionally, equity investors in FTX suffered losses amounting to $1.7 billion, while lenders to Bankman-Fried’s Alameda Research hedge fund faced a shortfall of $1.3 billion.

Source: Reuters