FTX Co-Founder Sam Bankman-Fried Sentenced to 25 Years in Prison for Fraud

A US Federal judge has sentenced Sam Bankman-Fried, co-founder of the bankrupt crypto exchange FTX, to 25 years in prison for defrauding customers and investors of his firm. Bankman-Fried’s legal team plans to appeal against the sentence, which was handed down in the Southern District of New York on the 28th of March.

Bankman-Fried was found guilty last November of seven counts of fraud and conspiracy related to the collapse of FTX in November 2022. The collapse came after the cryptocurrency exchange platform ran out of funds to process customer withdrawals.

The jury concluded that “Bankman-Fried had conducted an elaborate fraud whereby billions of dollars’ worth of user funds was swept into a sibling company and used to bankroll high-risk trading, venture bets, debt repayments, personal loans, political donations, and a lavish life in the Bahamas,” WIRED reported in a blog post.

The judge criticized Bankman-Fried for his actions, citing “unmatched greed and hubris” and “brazen disrespect for the rule of law.” Bankman-Fried’s counsel had argued for a lighter sentence of roughly 5 to 6.5 years, but the judge deemed a lengthy prison term necessary to reflect the seriousness of the crimes committed.

Bankman-Fried showed little visible reaction to the ruling, the BBC said in a Friday story covering the case. The 32-year-old billionaire once steered FTX to a valuation of $32 billion and was hailed as a crypto business celebrity. FTX was one of the largest crypto trading platforms in the world before its downfall.

Bankman-Fried said he knew “a lot of people” felt “really let down” earlier before his sentencing. “I’m sorry about that. I’m sorry about what happened at every stage,” he said. The judge ordered him to forfeit $11 billion in assets to compensate victims of the fraud. The government also has seized other assets, such as shares Bankman-Fried owned in Robinhood and the trading app, according to BBC.

Bankman-Fried’s case isn’t the first of its kind, but it has drawn widespread attention in the crypto industry, with implications for other executives and firms facing similar charges.

The rapidly evolving cryptocurrency landscape has also witnessed the case of Karl Sebastian Greenwood, who was sentenced to 20 years in prison in September last year for his role in defrauding OneCoin investors of more than $4bn alongside co-founder Ruja Ignatova (CryptoQueen). OneCoin was a Ponzi scheme, as it paid early investors with new investors’ funds.

There was also the case of Bernie Madoff, who was sentenced to 150 years in prison for running a $64bn Ponzi scheme after pleading guilty in 2009.