Sam Bankman-Fried Sentenced to 25 Years in Prison for Fraud and Conspiracy

FTX founder Sam Bankman-Fried has been sentenced to 25 years in prison after being found guilty of fraud and siphoning customer funds from the now-defunct FTX exchange.

The sentencing was handed by US District Judge Lewis Kaplan at a Manhattan court. The judge rejected the claims made by Bankman-Fried's defense that FTX customers did not lose money. The judge also added that the former crypto mogul was untruthful in his testimony.

Judge Kaplan: It is the judgment of the court that you are sentenced to 240 months then consecutive 60 [etc] for a total of 300 months [25 years]

- Inner City Press (@innercitypress) March 28, 2024

The 25-year prison sentence is a short term compared to what the prosecutors were seeking. The prosecution wanted him to serve 40-50 years in prison, while the Probation recommended 105 years. However, according to the judge, such a sentencing was more than necessary."

US Judge Paints a Grim Picture of Bankman-Fried

While handing over the sentence, Judge Kaplan painted a grim picture of the type of person Bankman-Fried had portrayed himself to be during the trial. The judge noted that the MIT graduate was extremely smart" and capable of huge accomplishments as seen in his role at Jane Street where he made a lot of money.

However, Bankman-Fried was also increasingly ambitious according to the judge. He wanted to have much political influence in the country, which explains the accusations of channeling customer funds towards political donations.

Judge Kaplan: He had been exceptionally ambitous and aware of his talents. Ms. Ellison testified that he was very ambitious. He talked about building two huge companies and very interested in politics and wanted to use his money to have an influence on politics

- Inner City Press (@innercitypress) March 28, 2024

According to Judge Kaplan, Bankman-Fried made these donations to promote a friendly crypto regulatory framework. Nevertheless, his actions were not genuine. While he claimed to promote a friendly regulatory framework, he also criticized regulators during a November interview held while he was in custody.

The judge also addressed Bankman-Fried's huge risk appetite saying that his behavior portrayed a man willing to flip a coin as to the continued existence of life on earth." Despite knowing that Alameda was using customer funds in risky investments, political donations, and property purchases, he did nothing to stop it.

The judge further said that while Bankman-Fried had the right to plead not guilty, he knew what he did was wrong. Furthermore, despite knowing that his image was already tainted around the world, the former billionaire remained persistent and would not admit to any wrongdoing.

While giving a 20-minute remark to the judge, Bankman-Fried acknowledged that FTX customers indeed suffered after the bankruptcy filing. He also apologized to his former colleagues at FTX but failed to admit to any wrongdoing.

Customers have been suffering ... I didn't at all mean to minimize that," he told the judge. 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."

Bankman-Fried to Appeal His Sentencing

Bankman-Fried has vowed to appeal this sentencing and conviction. According to Reuters, his parents, who were present in the courtroom during the sentencing, also vowed to continue fighting for their son.

While presenting his defense, Bankman-Fried's lawyers said that the FTX founder should be distanced from notorious financial crime faces like Bernie Madoff. They argued that while Madoff was a ruthless financial serial killer," Bankman-Fried was a math nerd who sought ways to reimburse customers after the exchange collapsed.

The lawyers also said that the decisions made by Bankman-Fried during the trial were not made with malice. Instead, he made careful calculations before making a decision.

The defense was also seeking a shorter prison sentence of less than five years. In their argument, they said that FTX customers received all their money back. The FTX bankruptcy estate announced that all customers would receive back their crypto holdings at the prices they traded at when the exchange was filing for bankruptcy.

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