FTX Co-founder Sam Bankman-Fried Sentenced to 25 Years in Federal Prison for Defrauding Billions from Clients
US District Judge Lewis A. Kaplan sentenced FTX co-founder Sam Bankman-Fried to 25 years in federal prison for defrauding and stealing billions of dollars from clients of the cryptocurrency platform. Despite Bankman-Fried’s claims of regret for the collapse of FTX, which revealed a fraud of about $10 billion, Judge Kaplan dismissed his statement as lacking true remorse and focused on the seriousness of the crimes.
The convicted man faced up to 110 years in prison after being found guilty last year of seven crimes, including fraud and conspiracy. Bankman-Fried, 32, initially denied knowingly committing fraud and blamed the 2022 market crashes for the downfall of FTX. However, Judge Kaplan expressed concerns about the risk of Bankman-Fried committing more offenses in the future.
During the trial, prosecutors accused Bankman-Fried of diverting billions of dollars from FTX to Alameda Research, a sister hedge fund, for speculative investments, political donations, and real estate purchases. As lenders began demanding their money back in 2022, Bankman-Fried used FTX client funds to repay them. The situation escalated with customer withdrawals leading to FTX filing for bankruptcy in November 2022 and Bankman-Fried resigning as CEO.
