Disgraced crypto king Sam Bankman-Fried sentenced to 25 years for FTX fraud

FTX founder Sam Bankman-Fried was sentenced to 25 years in prison by Judge Lewis A. Kaplan on Thursday. 

Prosecutors sought a 40- to 50-year sentence for the disgraced crypto king. Bankman-Fried's defense team will appeal the conviction and sentencing.

Kaplan said Bankman-Fried had shown no remorse.

"He knew it was wrong," Kaplan said of Bankman-Fried before handing down the sentence. "He knew it was criminal. He regrets that he made a very bad bet about the likelihood of getting caught. But he is not going to admit a thing, as is his right."

His parents, Barbara and Joseph Bankman-Fried, were present in the courtroom.

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Kaplan said he had found that FTX customers lost $8 billion, FTX's equity investors lost $1.7 billion, and that lenders to the Alameda Research hedge fund Bankman-Fried founded lost $1.3 billion.

"The defendant's assertion that FTX customers and creditors will be paid in full is misleading, it is logically flawed, it is speculative," Kaplan said. "A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back what he stole."

Bankman-Fried, 32, was found guilty in November on two counts of wire fraud and five counts of conspiracy following the collapse of his crypto empire FTX in November 2022, which has been compared to Enron. The exchange had merged assets with sister hedge fund Alameda Research amid cash problems, leading waves of customers to withdraw funds. Bankman-Fried was indicted the next month.

Referring to his FTX colleagues, Bankman-Fried told the judge on Thursday, "They put a lot of themselves into it, and I threw that all away. It haunts me every day."

By comparison, disgraced Theranos founder Elizabeth Holmes is serving an 11-year sentence, but faced as much as 80 years in prison. Bernie Madoff was sentenced to 150 years and died in prison.

Bankman-Fried, who capitalized on a rise in bitcoin and at one point accumulated an estimated $26 billion fortune, is also expected to be ordered to pay restitution.

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Bitcoin, which accounted for much of Bankman-Fried's net worth, fell as low as $15,000 and has since rebounded to the $70,000-plus level, following the approval of a bitcoin ETF by the Securities and Exchange Commission earlier this year.

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It's unclear how the rebound in crypto, if at all, will play out in providing restitution to his victims.

Reuters contributed to this report.