A Manhattan judge ripped Sam Bankman-Fried as a remorseless scammer obsessed with political power as he sentenced the dethroned crypto king to 25 years in prison Thursday — five months after he was found guilty of stealing more than $8 billion from customers of his now-bankrupt cryptocurrency exchange FTX.
Judge Lewis Kaplan said the 32-year-old former billionaire owner of the popular FTX trading platform “presented himself as the good guy” in favor of “appropriate regulation of the crypto industry” — but that his friendly persona was just an “act.”
“He did it because he wanted to be a hugely, hugely politically influential person in this country,” Kaplan said inside a packed federal courtroom in Manhattan. The judge then blasted the fallen mogul as having an “apparent lack of any real remorse.”
Bankman-Fried was also ordered to pay back more than $11 billion to FTX’s users, investors and lenders — but it was unclear Thursday how much of that sum he’d be able to pay.
The judge delivered the sentence — which was less than one-fourth of the 110-year max that Bankman-Fried faced and well under the 40-to-50 years prosecutors suggested — after the disgraced tech whiz delivered a 20-minute, meandering mea culpa to the court.
Wearing light tan jail garb and with his trademark messy black hair — which had been tightly cropped during the trial — grown back out, Bankman-Fried said he was “sorry about what happened at every stage.” He admitted that he had let down “everyone that I care about, and everything that I care about.”
But he continued to chalk up FTX’s November 2022 implosion to a series of “bad decisions,” rather than what the feds called a brazen crime: looting the accounts of tens of thousands of users to pay off debts, buy a luxury penthouse and donate tens of millions of dollars to politicians.
Before ordering Bankman-Fried to stand to hear his fate, Judge Kaplan said he was unconvinced by the former magnate’s attempt at an apology.
“He knew it was wrong. He knew it was criminal,” the judge said, as Bankman-Fried sat at the defense table with his hands clasped tightly together in front of him.
“He regrets that he made a very bad bet about the likelihood of being caught,” he added.
The judge cited damning testimony from Caroline Ellison — Bankman-Fried’s ex-girlfriend and business partner who became the government’s star witness — that the convicted fraudster was willing to lie and steal if he believed the ends would justify the means.
“There is a risk that this man will be in a position to do something very bad in the future, and it’s not a trivial risk,” Kaplan told the court. “So, in part, my sentence will be for the purpose of disabling him — to the extent that can be done — for a significant amount of time.”
“There is absolutely no doubt that Mr. Bankman-Fried’s name right now is pretty much mud around the world, but one of the things he is is persistent, and another of the things he is is a great marketing guy,” the judge added.
Bankman-Fried did not show noticeable emotion when the sentence was read, or when federal marshals led him from the courtroom in shackles.
But after hearing her son’s fate, his mother, Stanford Law professor Barbara Fried, burst into tears and placed her hands over her face from her seat in the gallery’s first row.
During his rambling address, Bankman-Fried maintained his actions “weren’t selfish” and said his “useful life” was over.
“I failed everyone that I care about and everything that I care about, too,” he said, standing with his head bowed and occasionally glancing at the judge.
“A lot of people feel really let down, and and they were right, they were, were very let down. I’m sorry about that. I’m sorry about what happened at every stage,” he continued.
Near the end of his speech, his right knee began twitching uncontrollably.
“My useful life is probably over,” he added. “It’s been over for a while now, from before my arrest.”
Bankman-Fried has been in jail since August after Judge Kaplan revoked his bail after finding that he tampered with witnesses, including by leaking Ellison’s diary to a journalist.
The judge suggested Thursday that Bankman-Fried be sent to a medium-security prison near his family’s home in Northern California, or to a more comfortable low-security lockup if the federal Bureau of Prisons sees fit.
Once inside, Bankman-Fried may be able to shave off a considerable chunk of his sentence — perhaps as high as 40 or 50 percent — with good behavior, said Mark Bini, a veteran prosecutor turned defense lawyer at white-shoe law firm Reed Smith. This means he could serve as little as 12.5 years behind bars.
The 25-year sentence pales in comparison to the fate of notorious fraudster Bernie Madoff, who Bankman-Fried was at times compared to amid his company’s collapse. Madoff was hit with a 150-year sentence after pleading guilty in the same Manhattan courthouse to charges from his massive Ponzi scheme.
Bankman-Fried’s lawyer, Marc Mukasey, had told the court that the MIT grad should not be thrown into the Madoff category of criminals.
“Sam was not a ruthless financial serial killer who set out every morning to hurt people,” Mukasey said. “Sam Bankman-Fried doesn’t make decisions with malice in his heart. He makes decisions with math in his head.”
Thursday’s sentence is considerably larger, however, than the penalty received by another infamous fraudster, Elizabeth Holmes. The 40-year-old Stanford dropout was ordered to serve 11 years on a conviction for hawking phony blood-testing technology at her company Theranos. Holmes has since knocked two years off of her sentence.
Bankman-Fried had emerged as crypto’s friendly face in the US before his platform’s sudden November 2022 meltdown.
With his company worth $40 billion at its peak, the tech mogul flew around on private jets, showered politicians who he thought might be crypto friendly with millions in donations, and even palled around with celebrities at the Super Bowl.
But weeks after his platform’s collapse, he was arrested in the Bahamas and charged with swiping FTX user funds to plug a $8 billion debt at his failing hedge fund Alameda Research.
In November last year, a jury convicted the ex-crypto golden boy on seven fraud and conspiracy counts. Jurors found that he had stole from the accounts of what prosecutors called “tens of thousands” of people — including in war-torn and unstable nations — who lost the nest eggs they entrusted to him.
Follow the latest on Sam Bankman-Fried ahead of his fraud sentencing:
Bankman-Fried also used FTX customer funds to make more than $100 million in political contributions before the 2022 elections and to buy a ritzy $40 million Bahamian penthouse where he and his colleagues lived and worked, prosecutors said.
The judge granted the feds’ request Thursday to order Bankman-Fried to pay $11 billion in restitution — $8 billion to customers, $1.7 billion to investors and $1.3 billion to lenders — that aims to make everyone whole.
Bankman-Fried’s lawyers also claimed that FTX’s customers and lenders will be able to recoup their losses through the company’s bankruptcy filing. But Judge Kaplan pushed back on that claim, calling it “misleading, logically flawed, and speculative.”
Bankman-Fried’s lawyers also argued that the feds unfairly painted the MIT grad during the trial as a “supervillain” stealing from his customers to live the high life — while he was never in fact driven by greed.
The convicted fraudster was actually solely motivated by donating his riches to charitable causes, his lawyer Mukasey claimed to the court.
Bankman-Fried cannot enjoy “fancy and expensive” things at all in fact because he suffers from a condition known as “anhedodia,” which is “characterized by a near-complete absence of enjoyment, motivation, and interest,” the lawyer argued.
The tech whiz’s mother had also urged the judge to give her son a lighter sentence because he has exhibited behavior consistent with people on the autism spectrum.
Bankman-Fried’s failure to read social cues will put him in “extreme danger” in prison, his mother warned.
“I genuinely fear for Sam’s life in the typical prison environment,” Fried wrote to the court.
A separate trial over Bankman-Fried’s alleged campaign finance violations that could have shed more light on his history of political donations — which include hefty contributions to Democrats like President Joe Biden and undisclosed “dark” payouts that benefitted top Republicans — was scuttled in December.
Prosecutors said that there was a “strong public interest” in sentencing Bankman-Fried as soon as possible given the massive forfeiture that would be set aside for victims.
The feds had also yet to secure permission from Bahamian officials that they needed to pursue the campaign finance charges under an extradition deal, US prosecutors said.
Bankman-Fried had also been hit with an explosive charge of bribing at least one Chinese official $40 million to help unfreeze a trading account that he owned, but that allegation also never made it to trial.
He has continued to maintain that he did not commit any crimes, and plans to appeal his conviction.
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