Sam Bankman-Fried, the co-founder of the now-defunct crypto exchange FTX, has been sentenced to 25 years in prison for defrauding customers and investors. The ruling marks the downfall of the former billionaire, who was a high-profile advocate for cryptocurrency before his firm’s dramatic collapse in 2022.
Bankman-Fried was found guilty of stealing billions from customers ahead of the failure of FTX, which was one of the world’s largest crypto exchanges before its demise. The platform attracted millions of customers who used it to buy and trade cryptocurrency.
Rumors of financial trouble in 2022 sparked a run on deposits, leading to the firm’s implosion and exposing Bankman-Fried’s crimes. He was convicted by a New York jury last year on charges including wire fraud and conspiracy to commit money laundering. The trial revealed that he had taken more than $8 billion from customers and used the money to buy property, make political donations, and invest in other ventures.
Before sentencing, U.S. District Judge Lewis Kaplan criticized Bankman-Fried’s behavior, stating that he had lied during his testimony at trial. The judge said that Bankman-Fried knew his actions were wrong and criminal, but he regretted making a bad bet about the likelihood of getting caught.
While the 25-year sentence is significant, it is far less than the more than 100 years Bankman-Fried could have received under official government guidelines. Federal prosecutors in New York had requested at least 40 years, arguing that Bankman-Fried had committed a massive fraud while showing a brazen disrespect for the law.
Bankman-Fried’s legal team will appeal against his conviction. They had argued for a lighter sentence of roughly five to 6.5 years, pointing out that he was a non-violent, first-time offender. They also highlighted his mental health struggles and argued that customers were poised to recover significant sums under a plan currently working through bankruptcy court.
This article is based on information from “Fallen ‘Crypto King’ Sam Bankman-Fried gets 25 years for fraud” by Natalie Sherman, Kayla Epstein & Michelle Fleury, published on BBC News.
