During his sentencing hearing on Thursday, U.S. District Judge Lewis Kaplan delivered a scathing rebuke to Sam Bankman-Fried, the founder of FTX. Judge Kaplan accused Bankman-Fried of being a remorseless and habitual liar who had perjured himself on the witness stand and attempted to tamper with witnesses. As a result, Bankman-Fried was sentenced to 25 years in prison, marking a dramatic downfall for the once-prominent figure in the cryptocurrency industry.
Bankman-Fried has been in custody since August after Kaplan grew tired of his pretrial antics and convicted him on seven fraud and conspiracy counts in November.
Kaplan dismissed Bankman-Fried’s argument that he should receive a lenient sentence since his victims may eventually recover their lost investments. The judge acknowledged that this could potentially occur due to the surge in cryptocurrency value. However, he provided an analogy to illustrate why Bankman-Fried is still culpable: Just like a thief who steals money, goes to Las Vegas, and makes a significant profit through gambling, Bankman-Fried remains a thief, even if the funds are eventually returned.
Kaplan expressed his frustration with Bankman-Fried, stating that he consistently presents a distorted version of reality in order to downplay his own responsibility. Despite publicly claiming to have good intentions in making the world a better place, Bankman-Fried privately made derogatory comments about authorities, according to Kaplan. As evidence, he referred to an interview where Bankman-Fried openly expressed his disregard for regulators by saying, “Fuck regulators.”
Sam Bankman-Fried’s parents, Barbara Fried and Allan Joseph Bankman, leave federal court following their son’s sentencing.
In a heartfelt address on Thursday, Bankman-Friedman expressed his sincere apologies for the downfall of the company and took full responsibility as its chief executive. He acknowledged that many individuals felt deeply disappointed and emphasized his own remorse for the impact on his employees and co-executives. He stated, “I have let down everyone I care about, and for that, I am truly sorry.”
In a statement, his parents expressed their deep sadness and determination to continue fighting for their son. Bankman-Fried, who is also required to surrender over $11 billion, is expected to be moved from the Metropolitan Detention Center in New York City to a nearby low or medium security facility closer to his parents in San Francisco.
Mr. Bankman-Fried, who is currently being held at the Metropolitan Detention Center in Brooklyn, is expected to be transferred to a low- or medium-security prison. The judge indicated that he will likely be sent to a facility near his parents’ residence in the San Francisco Bay Area.
In December 2022, Sam Bankman-Fried was seen being escorted in handcuffs to a plane as he was being extradited to the United States from the Bahamas.
During the trial, three of Bankman-Fried’s executives, namely Caroline Ellison, Nishad Singh, and Gary Wang, admitted their guilt in connection with the collapse and provided testimony against their former boss.
During her testimony, Ellison, who had a complicated romantic involvement with Bankman-Fried, openly criticized him. While admitting her own involvement in fraudulent activities and money laundering, Ellison boldly stated that Bankman-Fried had instructed her to carry out these illegal acts.
Singh agreed during his testimony that the magnitude of the wrongdoing was immense.
Bankman-Fried chose to testify in his defense, displaying a combative demeanor and denying knowledge of most of the company’s financial misconduct. However, he did acknowledge that there were significant oversights.
The jury quickly reached a unanimous verdict, finding him guilty on all seven counts.
After being convicted, prosecutors have asked for a prison sentence of 40 to 50 years. Neama Rahmani, a former federal prosecutor and president of West Coast Trial Lawyers, expressed surprise at the severity of the proposed punishment, stating that “people who commit murders sometimes get less than that.” Nevertheless, given the magnitude and audacity of Bankman-Fried’s fraud, he anticipated a significant sentence, as it stands as “one of the biggest and most brazen frauds in American history.”
Bankman-Fried’s companies were highly profitable and could have achieved success without resorting to fraudulent activities. However, instead of choosing honest work, he decided to pursue profit and power through illegal means. The proceeds from these unlawful actions were then used to indulge in a lavish and affluent lifestyle.
Meanwhile, Bankman-Fried’s parents, Barbara Fried and Joseph Bankman, former Stanford law professors, have made a plea for leniency. It should be noted that neither parent has been charged with a crime, although they were both involved in certain aspects of Bankman-Fried’s operations. Bankman was part of group chats with FTX leaders during the company’s collapse, where they deliberated on how to address the public. Fried, on the other hand, managed a political nonprofit that received funding from FTX. Additionally, the couple has allegedly received millions of dollars in gifts.
In a letter to Judge Kaplan, Fried expressed his skepticism towards others’ proclaimed intentions of doing good in the world. He acknowledged that it was even easier to be cynical in Sam’s case due to the media’s relentless portrayal of him as a cartoonish villain driven by greed, solely based on his connection to what has been referred to as “the fraud of the century.”
According to Fried’s mother, his dedication to veganism remains unwavering even while in custody at the Metropolitan Detention Center, despite the alleged absence of nutritious vegan options. She emphasized that his moral character is exemplified by this commitment. Fried reportedly lost 30 pounds during his initial six months behind bars. It is worth noting that Fried was initially under house arrest at his parents’ home in California before the trial, but was later accused of various infractions, including attempting to tamper with Ellison’s testimony by leaking private documents to The New York Times.
Bankman mentioned in a separate letter that his son has Autism Spectrum Disorder. He expressed concern that a lengthy sentence would expose his son to a social environment where his responses to social cues might be perceived as strange, inappropriate, and disrespectful. This, in turn, could potentially put his son at risk of physical harm.
Bankman-Fried’s lawyers had asked for a maximum sentence of 6.5 years, stating that “Sam is not the ‘evil genius’ portrayed in the media or the greedy villain depicted during the trial.”
