By Brett Rowland (The Center Square)
A judge sentenced FTX founder Samuel Bankman-Fried to 25 years in prison on Thursday, marking the long fall of the onetime cryptocurrency star.
U.S. District Judge Lewis Kaplan also sentenced Samuel Bankman-Fried, known as SBF, to three years of supervised release, and ordered him to pay $11 billion for orchestrating a massive fraud.
Bankman-Fried, who was the founder of the cryptocurrency exchange FTX and the cryptocurrency trading firm Alameda Research, misappropriated billions of dollars of customer funds deposited with FTX. He defrauded investors in FTX of more than $1.7 billion and defrauded lenders to Alameda of more than $1.3 billion, according to prosecutors.
“There are serious consequences for defrauding customers and investors,” Attorney General Merrick Garland said in a statement. “Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice.”
Bankman-Fried, 32, of Stanford, California, was previously convicted of two counts of wire fraud, two counts of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud, and one count of conspiracy to commit money laundering, after a one-month trial.
Bankman-Fried once led FTX, a digital asset exchange platform that skyrocketed in popularity before it crashed in 2022. Before the scandal, Bankman-Fried spent time with the rich and powerful. According to OpenSecrets, Bankman-Fried gave roughly $40 million in public donations in the 2022 election cycle, with the vast majority, $36.8 million, going to Democrat-affiliated groups. After the scandal, those who took Bankman-Fried’s money raced to give it back, as The Center Square previously reported.
Bankman-Fried’s sentence ranks among the longest for fraud in the U.S.
Bernard Ebbers, co-founder and CEO of WorldCom, got 25 years, but was released after 13 years due to declining health. He died a month after his release.
Enron CEO Jeffrey Skilling initially got 24 years, but that was later reduced to 14 years. He was released in 2019 after serving 12 years.
Bernie Madoff, the financier behind the largest known Ponzi scheme, got 150 years. He died in 2021 after serving nine years.
Bankman-Fried was the founder and chief executive officer of FTX, an international cryptocurrency exchange. From 2019 to 2022, he was the leader and mastermind of a scheme to defraud customers of FTX by misappropriating billions of dollars of those customers’ funds, according to federal prosecutors.
Bankman-Fried took FTX customer funds for his personal use, to make investments and millions of dollars of political contributions to candidates, and to repay billions of dollars in loans owed by Alameda Research, a cryptocurrency trading fund that Bankman-Fried also founded. Bankman-Fried also defrauded lenders to Alameda and equity investors in FTX by providing them false and misleading financial information that concealed his misuse of customer deposits, prosecutors said.
Syndicated with permission from The Center Square.
