Sam Bankman-Fried has been sentenced to 25 years in jail for stealing $US8 billion ($12.3 billion) from customers of the now-bankrupt FTX exchange he founded.
District Judge Lewis Kaplan handed down the sentence in New York on Thursday, saying Bankman-Fried knew he was defrauding customers.
“He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right,” Judge Kaplan said.
A jury found 32-year-old Bankman-Fried guilty in November on seven fraud and conspiracy counts stemming from FTX’s 2022 collapse.
Prosecutors had described the fraud as one of the biggest in US history in seeking a prison sentence of between 40 and 50 years.
Bankman-Fried has vowed to appeal his conviction and sentence.
During the hearing, Bankman-Fried apologised for not having acknowledged the pain caused to FTX customers during previous court proceedings.
“Customers have been suffering … I didn’t at all mean to minimise that,” he said.
“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.”
Several FTX customers had written to judge Kaplan expressing dismay that they would be compensated based on the value of their cryptocurrency at the time of FTX’s bankruptcy, rather than the higher levels at which those assets currently trade.
Bankman-Fried has been held at the Metropolitan Detention Center in Brooklyn since August 2023, when judge Kaplan revoked his bail after finding he likely tampered with witnesses at least twice.
‘Promise of false hope’
A Massachusetts Institute of Technology graduate, Bankman-Fried rode a boom in the values of Bitcoin and other digital assets to a net worth of $US26 billion, according to Forbes magazine, before he turned 30.
Bankman-Fried became known for his mop of unkempt curly hair and commitment to a movement known as effective altruism, which encourages talented young people to focus on earning money and giving it away to worthy causes.
He was one of the biggest contributors to Democratic candidates and causes ahead of the 2022 US midterm elections.
But prosecutors say the responsible image he cultivated concealed his years-long embezzlement of customer funds.
At trial, three of his former close associates testified that he directed them to use FTX customer funds to plug losses at his crypto-focused hedge fund, Alameda Research.
Bankman-Fried testified in his own defence that he made mistakes such as not implementing a risk management team, but denied he intended to defraud anyone or steal customers’ money.
In their sentencing memorandum, prosecutors said Bankman-Fried could commit fraud again if released at a young age.
They pointed to his personal writings in the weeks following FTX’s collapse, in which he mused about options for restoring his image such as “come out against the woke agenda” or pushing the idea that “SBF died for our sins”.
“It is realistic that he will settle on a narrative, lean into it, and convince other people to part with their money based on lies and the promise of false hope,” prosecutors wrote.
Reuters