News Americas, NEW YORK, NY, Thurs. Mar. 28, 2024: From luxury living in the Bahamas to a prison cell for 25 years.
Sam Bankman-Fried, once celebrated as a cryptocurrency guru and co-founder of FTX Cryptocurrency Derivatives Exchange, now faces a starkly different reality. On Thursday, March 28th, he was sentenced to 25 years behind bars for his role in defrauding users of the now-defunct exchange. The sentencing, handed down by U.S. District Judge Lewis Kaplan in a Lower Manhattan federal courtroom, marked the culmination of a dramatic downfall for Bankman-Fried.
Barbara Fried and Allan Joseph Bankman, parents of FTX Co-Founder Sam Bankman-Fried, arriving at federal court on March 28, 2024 in New York City. (Photo by David Dee Delgado/Getty Images)
A big part of Bankman-Fried’s journey to criminal court traces back to the $35 million Bahamian property he shared with nine people. FTX was registered in the Bahamas and the Securities Commission of The Bahamas says it seized $3.5 billion worth of cryptocurrency from collapsed crypto exchange FTX in late 2022. FTX was incorporated in Antigua and Barbuda and headquartered in the Bahamas.
During the proceedings, Judge Kaplan rebuffed the defense’s argument, describing it as misleading, logically flawed, and speculative. He also noted Bankman-Fried’s obstruction of justice and witness tampering as aggravating factors in his sentencing decision.
Dressed in a beige jailhouse jumpsuit, Bankman-Fried expressed remorse, acknowledging his “selfish” decisions while leading FTX and the consequential impact on users. “It haunts me every day,” he admitted.
The sentencing follows Bankman-Fried’s conviction on seven criminal counts in November, which stemmed from FTX’s collapse in 2022. Prosecutors had sought a sentence of up to 50 years, while Bankman-Fried’s defense team advocated for no more than 6½ years.
Throughout the trial, Bankman-Fried’s defense argued for leniency, citing his purported mental health struggles and personal generosity. However, prosecutors highlighted the gravity of the crime, emphasizing the significant losses suffered by victims and Bankman-Fried’s apparent lack of remorse.
In a poignant turn, victims shared testimonies detailing the profound emotional and financial toll inflicted by Bankman-Fried’s actions. One victim recounted the devastation of losing life savings, while another spoke of the impact on family and mental health.
Bankman-Fried’s sentence is notably longer than those typically handed down in white-collar crime cases. Comparatively, Elizabeth Holmes, the founder of Theranos, received about 11 years, while Bernie Ebbers, the former CEO of WorldCom, received 25 years.
FTX, once valued at over $30 billion, collapsed after revelations of a major cash shortfall. Prosecutors alleged that Bankman-Fried embezzled billions from FTX customers to fund various endeavors, including political initiatives and personal investments.
Despite plans to appeal his conviction, Bankman-Fried’s future remains uncertain as he awaits placement in a federal penitentiary designated by the U.S. Bureau of Prisons.
