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Sam Bankman-Fried, the previous cryptocurrency mogul who was convicted of fraud, was sentenced to 25 years in jail on Thursday, capping a unprecedented saga that upended the multi-trillion-dollar crypto trade and have become a cautionary story of greed and hubris.
Mr. Bankman-Fried’s sentence was shorter than the 40 to 50 years that federal prosecutors had beneficial, however above the six-and-a-half-year sentence requested by the protection attorneys. A federal probation officer had beneficial 100 years, just below the utmost potential penalty of 110 years behind bars.
The sentence was handed down by Judge Lewis A. Kaplan on the Federal District Court in Manhattan. Mr. Bankman-Fried, 32, was within the courtroom, clear shaven and carrying a unfastened becoming brown jail uniform.
Before the sentence was delivered, Mr. Bankman-Fried apologized to FTX prospects, traders and staff. “Lots of people really feel actually let down, and so they had been very let down,” he mentioned. “I’m sorry about that. I’m sorry about what occurred at each stage.” He added that his choices “hang-out” him every single day.
The sentencing signified the finale of a sweeping fraud case that uncovered the rampant volatility and risk-taking throughout the loosely regulated world of cryptocurrencies. In November 2022, Mr. Bankman-Fried’s crypto change, FTX, imploded nearly in a single day, erasing $8 billion in buyer financial savings. At a trial final fall, he was convicted of seven counts of fraud, conspiracy and cash laundering.
His sentence ranks as one of many longest imposed on a white-collar defendant lately. Bernie Madoff, who orchestrated a infamous Ponzi scheme that unraveled throughout the 2008 monetary disaster, acquired a 150-year sentence in 2009. He was in his 70s on the time and died 12 years later. Elizabeth Holmes, who was convicted of defrauding traders in her blood-testing startup, Theranos, was sentenced to 11 years and three months in 2022.
A consultant for Mr. Bankman-Fried didn’t instantly reply to a request for remark.
Just 18 months in the past, Mr. Bankman-Fried was a company titan and one of many youngest billionaires on the planet. With his face plastered on billboards and journal covers, he might increase cash seemingly at will. He hobnobbed with actors, musicians and celebrity athletes, cultivating a picture as a nerdy do-gooder who meant to donate all his wealth to charity.
Based within the Bahamas, FTX was one of many largest marketplaces for cryptocurrencies — an easy-to-use platform the place traders might change {dollars} or euros for digital cash like Bitcoin and Ether. Its valuation was north of $30 billion.
But over lower than every week in November 2022, a run on deposits uncovered an $8 billion gap in FTX’s accounts. Mr. Bankman-Fried resigned, handing over energy to a staff of attorneys who promptly filed for chapter. The subsequent month, he was arrested at his luxurious house within the Bahamas and charged with stealing from prospects to finance billions in political contributions, charitable donations and investments in different start-ups.
The investigation moved with startling pace for such a fancy case. Within months, three of Mr. Bankman-Fried’s prime deputies, together with a former girlfriend, pleaded responsible to fraud prices and agreed to cooperate with prosecutors. Mr. Bankman-Fried was initially granted residence detention, however the judge revoked his bail in August after ruling that he had tried to intimidate witnesses, and despatched him to the Metropolitan Detention Center in Brooklyn.
At the trial in October, Mr. Bankman-Fried’s former colleagues testified for the prosecution, telling a jury that they’d conspired with him to loot buyer accounts. When he took the witness stand, Mr. Bankman-Fried appeared evasive at occasions, repeatedly claiming that he couldn’t keep in mind essential particulars of his FTX tenure.
After he was convicted, Mr. Bankman-Fried’s attorneys and household launched into a long-shot marketing campaign to safe a lenient sentence and rewrite the general public narrative about FTX’s failure. In a sentencing memo, Marc Mukasey, one of many protection attorneys, argued that Mr. Bankman-Fried had typically behaved surprisingly on the stand as a result of he was autistic. He additionally cited the mogul’s charitable initiatives, arguing that FTX was imagined to be a power for good on this planet.
But the protection’s case centered on the cash that FTX customers misplaced when the change went below. Mr. Mukasey claimed that prospects had been set to be made entire within the chapter course of, placing the losses brought on by Mr. Bankman-Fried’s actions at “zero.”
The authorities rejected that argument. While FTX’s new management has predicted that prospects will ultimately get their deposits again, the cash they obtain will likely be equal to the greenback worth of their holdings in November 2022 — and received’t account for a current surge within the crypto markets that despatched Bitcoin to its highest-ever value.
Mr. Bankman-Fried “demonstrated a brazen disrespect for the rule of regulation,” prosecutors wrote in a sentencing memo. “He knew what society deemed unlawful and unethical, however disregarded that primarily based on a pernicious megalomania.”
Judge Kaplan mentioned on Thursday of FTX’s victims: “The defendant’s assurance that they are going to be paid in full is deceptive. It is logically flawed. It is speculative.”
Over the previous a number of weeks, the prosecutors filed dozens of letters from victims of Mr. Bankman-Fried’s crimes that laid out how the monetary losses had devastated their lives. One buyer mentioned FTX’s collapse led to “suicidal ideas.”
“Sam Bankman-Fried has to suppose for the remainder of his lifetime of the multitude of lives he destroyed along with his selfishness and superficiality,” the shopper wrote. “I actually hope that justice will train him the distinction between life and video video games.”
One FTX buyer, Sunil Kavuri, who misplaced $2 million within the cryptocurrency change’s implosion, spoke on the sentencing listening to. “I’ve lived the FTX nightmare for nearly two years,” he mentioned.
Mr. Mukasey sought to distance his consumer from different fraudsters. “Sam was not a ruthless monetary serial killer who set out each morning to harm folks,” he mentioned, including, “Really, he’s a clumsy math nerd.”
Mr. Bankman-Fried has vowed to attraction his conviction, hiring a lawyer from the regulation agency Shapiro Arato Bach to supervise that effort.
But Mr. Bankman-Fried appeared to simply accept on Thursday that he can be in jail for a while. “At the tip of the day, my helpful life might be over now,” he mentioned.
Matthew Goldstein contributed reporting.
