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FTX founder Sam Bankman-Fried sentenced to 25 years for crypto fraud, to pay $11 billion in forfeiture

Sam Bankman-Fried, the creator of FTX, was sentenced to 25 years in jail on Thursday for the vast fraud and conspiracy that brought down his cryptocurrency exchange and a connected hedge fund, Alameda Research.

The punishment in Manhattan federal court was much less than the 40 to 50 years in jail sought by federal prosecutors for Bankman-Fried, but it was far greater than the five to six-and-a-half years proposed by his defense.

“There is a risk that this man will be in a position to do something very bad in the future,” Judge Lewis Kaplan said before sentencing the 32-year-old and ordering him to forfeit $11 billion to the US government.

“And it’s not a minor risk at all,” Kaplan said.

Kaplan stated that he had never heard Bankman-Fried express “a word of remorse for the commission of terrible crimes”.

The judge stated that during his 30 years on the federal bench, he had “never seen a performance” like Bankman-Fried’s trial testimony.

If Bankman-Fried wasn’t “outright lying” during prosecutors’ cross-examination, he was “evasive,” Kaplan claimed.

“There is absolutely no doubt that Mr. Bankman-Fried’s name right now is pretty much mud around the world,” the judge went on to say.

Jurors at the trial also did not believe Bankman-Fried’s account of events, convicting him in November on seven criminal counts and held him responsible for the loss of around $10 billion in customer funds as a result of the securities fraud conspiracy.

Prosecutors claimed Bankman-Fried orchestrated a conspiracy to steal customer funds for investments, political donations to both Democrats and Republicans, personal use, and loan repayment by Alameda Research.

Before being convicted, Bankman-Fried spoke contritely, claiming that the billions of dollars lost by consumers were due to a “liquidity crisis” or “mismanagement,” rather than fraud.

“Many individuals are deeply disappointed. “And they were very disappointed,” he continued. “And I apologize for that. I apologize for what happened at every stage.”

“My useful life is probably over,” he replied, donning a beige jailhouse jumpsuit. “It’s been over for a while now since before my arrest.”

“They built something really beautiful, and I threw all of that away,” he claimed of his colleagues at FTX, which was once valued at $32 billion. “It haunts me every day.”

“It’s been excruciating to watch this all unfold,” he told Kaplan. “Customers don’t deserve this level of pain.”

“I was the CEO of FTX and I was responsible.”

Even as he accepted some responsibility, Bankman-Fried maintained that clients will eventually receive their money back from his exchange, blaming a federal bankruptcy court for not doing so sooner.

Kaplan appeared to stop paying close attention at this moment.

Bankman-Fried responded by crossing his arms and rapidly tapping his right foot while continuing to speak.

Assistant U.S. Attorney Nicolas Roos, who is pushing for a jail sentence of up to five decades, dismissed the picture portrayed by Bankman-Fried and his defenders.

The fall of FTX in late 2022 was not caused by “a liquidity crisis or an act of mismanagement,” according to Roos. “It was the theft” of billions of dollars in customer money around the world, the prosecutor claimed. “It was a loss that affected people significantly.”

Bankman-Fried’s lawyer, Marc Mukasey, asked Kaplan for leniency based on his client’s psychiatric issues, adding that his mother stated that Bankman-Fried has “terrific sadness at his core,” which has been “a constant presence in his life.”

Mukasey pointed out that Bankman-Fried previously stated in his journal that he “doesn’t feel pleasure or happiness.”

“Sam was not a ruthless financial serial killer who set out every morning to hurt people,” stated the defense attorney.

Rather, “He’s an awkward math nerd” with a “tireless work ethic,” claimed the lawyer, who also compared the FTX founder to “a beautiful puzzle.”

Bankman-Fried should not be placed in a “four-by-four iron box,” Mukasey contended.

Before sentencing Bankman-Fried, Kaplan said he rejected “the entirety of the defendant’s argument that there was no loss” at FTX, calling it “misleading, logically flawed, and speculative.”

Sunil Kavuri, a victim of Bankman-Fried, then discussed the damage he inflicted.

Bankman-Fried gazed at Kavuri as he recalled speaking with thousands of other FTX scam victims, many of whom are depressed and on prescription medicine to cope with the tragedy of their losses.

“I suffered every day for the past two years,” Kavuri explained. “I continue to suffer.”

In a statement released following the sentencing, Manhattan U.S. Attorney Damian Williams stated that “Samuel Bankman-Fried orchestrated one of the largest financial frauds in history.”

“His deliberate and ongoing lies demonstrated a brazen disregard for his customers’ expectations and disrespect for the rule of law, all so that he could secretly use his customers’ money to expand his own power and influence,” Williams said in a statement.

Merrick Garland, Attorney General of the United States, remarked, “Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice.”

Bankman-Fried’s family issued a statement saying, “We are heartbroken and will continue to fight for our son.” Stanford Law professors Joseph Bankman and Barbara Fried sat in the first row of the courtroom gallery throughout the sentencing.

Bankman-Fried intends to appeal his conviction and punishment.

Three additional people, all of whom testified against Bankman-Fried at trial, are awaiting their own sentences after pleading guilty to criminal offenses relating to FTX and Alameda Research.

They are Caroline Ellison, CEO of Alameda Research, who once dated Bankman-Fried; Nishad Singh, FTX’s engineering chief; and Gary Wang, FTX’s co-founder and CTO.



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