A U.S. federal judge in the Southern District of New York sentenced Sam Bankman-Fried, founder of bankrupt cryptocurrency exchange FTX, to 25 years in prison.
Last November, at the end of a month-long trial, Bankman-Fried, commonly known as SBF, was found guilty of seven counts of fraud and conspiracy related to the FTX collapse.
The exchange collapsed in November 2022 as it ran out of funds to process customer withdrawals. The jury concluded that the missing money was the result of an elaborate fraud by Bankman-Fried, in which billions of dollars worth of user funds were diverted to a sister company and used to finance high-risk transactions, Venture capital, debt repayment, personal loans provide funding. , political donations and luxury living in the Bahamas.
In a court filing, the U.S. government described the incident as “one of the largest financial frauds in history.” The report said Bankman-Fried displayed “unparalleled greed and arrogance” and a “blatant disrespect for the rule of law.”
The verdict put him completely out of favor. Between 2019 and 2022, Bankman-Fried raised FTX’s valuation to $32 billion, becoming the world’s youngest self-made billionaire at one point. The 32-year-old has hobnobbed with regulators, politicians, sports stars and supermodels. He has won the admiration of sycophantic venture capitalists and the media, who have hailed him as “the next Warren Buffett” and “the Michael Jordan of crypto.” Bankman-Fried reportedly told others privately that he aspired to become president of the United States.
Over the next several decades, Bankman-Fried would live a far less glamorous life in prison.
When considering the appropriate sentence for Bankman-Fried, a judge must consider a variety of factors beyond the basic details of the crime. These include the extent of the financial harm suffered by the victim, the defendant’s character and history, whether any obstruction of justice occurred, the likelihood of recidivism, and more.
“The court treats the defendant as a whole person, no matter how good or bad he is,” said Joshua Naftalis, a former U.S. prosecutor and a partner at the law firm Pallas Partners. He said that if the purpose of the trial It is a “snapshot” to evaluate someone’s behavior, then the purpose of sentencing is to “comprehensively measure the person.”
Prosecutors sought a maximum sentence of 50 years in prison, while Bankman-Fried’s legal counsel asked the court for leniency. Those who describe clients as “cold manipulators” or “people with no morals” “do not know the real Sam Bankman-Fried,” the defense wrote. They highlighted his history of philanthropy, his vegetarianism and his anhedonia – a condition that ostensibly meant he was unable to experience happiness.
The defense’s court filing also included letters from Bankman-Fried’s family and multiple colleagues testifying to his good character, remorse and utilitarian ideals. “The public perception of Sam couldn’t be further from the truth,” his mother, Barbara Fried, wrote. “Being locked up in jail for decades would certainly destroy Sam, just like hanging him would, because it would take away everything in the world that gave his life meaning.”