Disgraced billionaire FTX founder known as a ‘crypto genius’ before his fall from grace, was sentenced to 25 years in prison, culminating more than one year of trial since the collapse of the cryptocurrency exchange at the hands of fraud. He was accused of stealing 8 billion dollars in customer funds.
U.S. District Judge Lewis Kaplan handed down the sentence in a Manhattan court hearing. “He knew it was wrong. 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.”
Why it matters
He was found guilty in November of fraud and money laundering charges. But his defense advocated for a sentence of five to seven years.
Judge Kaplan chose a harsher sentence of 25 years, chiding Bankman-Fried’s “apparent lack of any remorse,” and the massive loss to customers.
The big picture
FTX, Bankman Fried’s cryptocurrency exchange, was based in the Bahamas, and world leaders and A-list celebrities endorsed his billion-dollar crypto exchange. Over one million customers lost $8 billion when it was discovered he channeled customer funds in a hedge fund called Alameda Research, and could not recoup customers’ lost investment.
Bankman-Fried dispersed his altruism with monetary donations to charities throughout the Bahamas and donated to some politicians in the Bahamas and USA alike, hoping to persuade crypto legislature in his favor.
After the collapse of the empire in what prosecutors have called one of the biggest financial frauds in U.S. history, he was arrested and held at the Bahamas Department of Corrections, fighting extradition but later surrendered to the US to face charges.
What Bankman-Fried says
Bankman-Fried, in a beige short-sleeve jail T-shirt, apologized to his former FTX colleagues, however he did not admit any criminal wrongdoing.
He vows to appeal the sentence.