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Sam Bankman-Fried sentenced to 25 years in prison for fraud at FTX

FTX Founder, Sam Bankman-Fried, was on Thursday sentenced to 25 years in prison by Southern District of New York (SDNY) Judge Lewis Kaplan.

The judgment came about five months after he was found guilty on all seven counts related to fraud and money laundering during his trial.

Reports indicated that earlier this month, U.S. prosecutors from the Department of Justice called for a “necessary” 40 to 50-year sentence for him. “The sheer scale of Bankman-Fried’s fraud calls for severe punishment. The amount of loss—at least $10 billion—makes this one of the largest financial frauds of all time,” the prosecutors were quoted.

However, Judge Kaplan during Thursday's judgment said that range “would be more than necessary.”

No remorse

Before handling the judgment, Judge Kaplan said Bankman-Fried had shown no remorse and only regretted being caught.

  • "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.
  • “When not lying, he was evasive, hair-splitting, trying to get the prosecutors to rephrase questions for him. I’ve been doing this job for close to 30 years. I’ve never seen a performance like that,” Kaplan said.

Kaplan said he had found that FTX customers lost $8 billion, FTX's equity investors lost $1.7 billion, and that lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion.

  • “The defendant's assertion that FTX customers and creditors will be paid in full is misleading, it is logically flawed, it is speculative. A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back what he stole,” Kaplan said.

The judge also said Bankman-Fried lied during his trial testimony when he said he did not know that his hedge fund had spent customer deposits taken from FTX.

Bankman-Fried spoke

Addressing the judge, Bankman-Fried said:

  • "Customers have been suffering... I didn't at all mean to minimize that. 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."
  • Referring to his FTX colleagues, Bankman-Fried told the judge, “They put a lot of themselves into it, and I threw that all away. It haunts me every day.”

Three of his former close associates testified as prosecution witnesses at trial that he had directed them to use FTX customer funds to plug losses at Alameda Research.

The sentence marked the culmination of Bankman-Fried's plunge from an ultra-wealthy entrepreneur and major political donor to the biggest trophy to date in a crackdown by U.S. authorities on malfeasance in cryptocurrency markets. Bankman-Fried has vowed to appeal his conviction and sentence.

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