FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison for stealing billions of dollars from customers, marking the final chapter in a case that has upended the crypto industry.
U.S. District Judge Lewis A. Kaplan delivered the sentence in federal court in Manhattan moments after Bankman-Fried said he was "sorry about what happened at every stage." He was convicted last year of seven offenses, including fraud and conspiracy.
The one-time billionaire became a symbol of malfeasance and greed in the crypto world after his hugely popular FTX exchange collapsed, exposing a yearslong fraud that swindled about $10 billion from customers, investors and lenders.
Bankman-Fried, 32, had denied knowingly committing fraud and claimed he and his crypto empire were victims of market downturns in 2022.
Prosecutors had sought a sentence of as much as 50 years while Bankman-Fried's lawyers had asked for just 6 1/2 years. While there is no parole in the federal system, he could be released a few years early for good behavior.
Kaplan dismissed Bankman-Fried's 20-minute statement, saying he wasn't truly remorseful and focused instead on the severity of the crime. The sentence all but ensures that the onetime wunderkind will be in prison well past his 50th birthday.
"There is a risk that this man will be in a position to do something very bad in the future," Kaplan said. "And it's not a trivial risk. Not a trivial risk at all
Bankman-Fried, in a tan prison jumpsuit with his hair grown back out in contrast to a short cut at trial, stood with his hands clasped in front of him as the judge read out the sentence. He didn't react and kept his gaze low. His mother, Barbara Fried, looked out the window while his father, Joe Bankman, held his head in his hands.
In addition to the prison sentence, Kaplan said that Bankman-Fried should forfeit more than $11 billion. The judge said he would recommend that he is incarcerated at a facility near his parents' home in California, noting his notoriety and autism made him more vulnerable.
While Bankman-Fried has already signaled his intention to appeal his conviction, he also has a right to challenge the sentence.
At trial, prosecutors said Bankman-Fried siphoned billions of dollars from FTX to its sister hedge fund, Alameda Research, to spend on speculative investments, more than 300 political donations and expensive real estate.
Faced with market volatility, lenders began asking for their money in 2022 and Bankman-Fried used FTX customer funds to pay them back. But a rush of customer withdrawals culminated in FTX filing for bankruptcy in November 2022, and Bankman-Fried stepping down as chief executive officer.
While prosecutors compared Bankman-Fried to Bernie Madoff who was sentenced to 150 years for a massive Ponzi scheme, his sentence is more in line with the prison term that former Enron Corp. CEO Jeffrey Skilling received for accounting fraud. He was sentenced to 24 years, though it was reduced on appeal.
"While less than the prosecutors' request for 40 to 50 years, it is a very significant sentence," said Mark Bini, a former federal prosecutor who is now a lawyer at Reed Smith. It "sends a message that people convicted of crimes in the crypto space will face serious consequences."
Before sentencing, Bankman-Fried's lawyer gave an impassioned appeal for a light sentence. Marc Mukasey praised his client's dedication to helping others, citing the funds he raised for charity as well as the time in jail he has used to help other inmates study for general education equivalency degrees.
