Sam Bankman-Fried, a former cryptocurrency billionaire, was sentenced to 25 years in jail on Thursday for his role in planning one of the worst financial crimes in American history. The 32-year-old Bankman-Fried was found guilty in November of several charges, including conspiracy to commit commodities and securities fraud, money laundering, and fraud. Given the seriousness of the fraud, prosecutors suggested a sentence of 40 to 50 years, even though the federal sentencing guidelines allowed for a maximum of 110 years. Judge Lewis Kaplan imposed the 25-year sentence on Bankman-Fried despite the defense team’s request for a sentence of no more than six and a half years, citing worries about the risk Bankman-Fried posed for future wrongdoing. The Southern District of New York’s U.S. Attorney, Damian Williams, emphasized the importance of the sentence as a deterrent to anyone considering financial crimes. Attorneys for Bankman-Fried argued that their client had no intention of defrauding clients, depicting him as a kind person who tried to reimburse investors following FTX’s failure. Relying on a defense attorney who called Bankman-Fried an “awkward math nerd,” Marc Mukasey asked the judge for leniency.
Although it is expected that Bankman-Fried will file an appeal of his conviction, former federal prosecutor Andrey Spektor emphasized the seriousness of the decision by pointing out the remote likelihood of a reversal. Despite the possibility of a longer sentence, Spektor noted that there is unlikely to be any joy surrounding the 25-year sentence, implying that it is a depressing result for Bankman-Fried and his family. There was a clear difference in opinion amongst attorneys about Bankman-Fried’s sentence; some expected him to get a lower sentence because of his training and experience, while others predicted a heavier penalty. Professor of business law at Case Western Reserve University, Anat Alon-Beck, emphasized the special nature of the case and the judge’s dedication to responsibility, drawing a comparison between Elizabeth Holmes’s sentence and that of Bankman-Fried. During the sentencing hearing, Bankman-Fried apologized to his former coworkers at FTX for wasting their time and expressed regret for his behavior at every turn. His conviction was a result of the abrupt demise of FTX in 2022, which was formerly the second-largest cryptocurrency exchange globally and had an $8 billion funding deficit. Bankman-Fried was charged by the prosecution with embezzling depositor money to maintain his collapsing hedge fund and make opulent gifts and purchases. FTX’s demise was sparked by the 2022 drop in cryptocurrency prices, which revealed improper fund and investment strategy management. Bankman-Fried was further accused by prosecutors due to his affiliation with FTX’s hedge fund affiliate, Alameda Research, where it was claimed he used customer cash to support Alameda’s operations. Testimony from former FTX employees, such as Bankman-Fried’s ex-partner Caroline Ellison, further supported the accusations of fraud, emphasizing the seriousness of the charges against him.