Disgraced 'crypto king' jailed for 25 years after stealing billions of dollars from FTX customers

Hidden entrances had been set up, enabling Alameda Research, another company owned by SBF, to access funds belonging to FTX customers and engage in risky investments without their awareness.

Convicted crypto entrepreneur Sam Bankman-Fried has been handed a 25-year prison sentence for embezzling billions of dollars from his clients. As the CEO of FTX, the company unexpectedly declared bankruptcy in November 2022, resulting in millions of users being unable to access their accounts or withdraw funds.

The 32-year-old American could have potentially faced a century-long prison term, but last month, his legal team argued that such a punishment would be excessively severe, advocating for a five-year sentence instead. Initial reports suggested a 20-year sentence, but it has since been clarified to be 25 years.

Prosecutors had recommended a 40 to 50-year imprisonment, asserting that a stringent penalty was necessary to safeguard the public from the perpetrator and to serve as a deterrent to other potential criminals.

In a court filing, prosecutors highlighted the defendant's extensive wrongdoing, spanning numerous years and impacting tens of thousands of individuals and businesses across multiple continents. They cited instances of embezzlement from trusting customers, deception of investors, submission of falsified documents to lenders, illegal contributions to the political system, and bribery of foreign officials. Each of these offenses, they argued, warranted a substantial sentence.

Prosecutors further asserted that Bankman-Fried had caused losses exceeding $10 billion to customers, investors, and lenders by diverting funds to advance his pursuit of influence and dominance within the industry. They claimed he unlawfully utilized money from FTX depositors to fund personal expenses, including the acquisition of luxury properties in the Caribbean, alleged bribes to Chinese officials, and private jet expenses.

During the sentencing proceedings in Manhattan, Judge Lewis Kaplan stated that the businessman had lied under oath when he denied knowledge of customer funds being utilized in such a manner. Additionally, the judge criticized Bankman-Fried's assertion that victims would be fully reimbursed as "misleading and logically flawed."

Judge Kaplan cautioned that a thief who uses stolen funds to gamble in Las Vegas and subsequently wins cannot expect a reduced sentence by repaying what was stolen with the gambling winnings.

The judge expressed concerns about the potential for the individual to commit further serious offenses in the future, emphasizing that this risk was significant and not to be underestimated. The sentence was intended to incapacitate him to the greatest extent possible for a substantial duration.
Before receiving the sentence, Mr. Bankman-Fried delivered a lengthy apology.

Bankman-Fried expressed regret for letting down many people and acknowledged their disappointment, expressing apologies for the events that transpired at every phase. He also reflected on the probable end of his productive life, noting that it had effectively ended prior to his arrest.

Judge Kaplan indicated that he would recommend the Federal Bureau of Prisons to place Bankman-Fried in a medium-security facility or lower in the vicinity of San Francisco. This decision was influenced by the assessment that he is unlikely to pose a physical threat to other inmates or prison staff, and his autism and social awkwardness would render him vulnerable in a high-security environment.

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In November, a jury in New York took only five-and-a-half hours to find him guilty on two counts of fraud and five counts of conspiracy. Three individuals close to Bankman-Fried, including his former girlfriend Caroline Ellison, admitted guilt to related offenses and provided testimony during his trial.

Bankman-Fried's conviction marked a significant downfall from his tenure as CEO of FTX, once the world's second-largest cryptocurrency exchange. During this time, he amassed considerable wealth, although much of it was on paper.
FTX facilitated investment in numerous virtual currencies, ranging from popular options like Bitcoin to more niche ones such as Shiba Inu Coin.

With billions of dollars from investors at his disposal, Bankman-Fried experienced a wave of success, marked by high-profile events such as a Super Bowl advertisement and endorsements from celebrities like Tom Brady, Stephen Curry, and Larry David.

However, following the cryptocurrency market crash in 2022, Bankman-Fried attempted to address financial deficits within FTX's hedge fund subsidiary, Alameda Research.
Victims of Bankman-Fried's actions, including an estimated 80,000 individuals in the UK, have suffered financial losses, with some losing their life savings. Prosecutors characterized his offenses as one of the largest financial frauds in US history.