Convicted FTX founder Sam Bankman-Fried admitted Thursday his “useful life is probably over” as his high-profile criminal fraud case came to a close with a federal judge in New York sentencing the disgraced former crypto head to 25 years in prison.
Sam Bankman-Fried, the convicted FTX founder, apologized to his former customers in a federal court on Thursday, saying his “useful life is probably over.”
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Key Takeaways
- Bankman-Fried, who was convicted late last year on seven counts of conspiracy, wire fraud, securities fraud and money laundering, was sentenced to 25 years in prison on Thursday, short of the 40 to 50 years prosecutors had requested and the maximum 110-year sentence he faced.
- Speaking in U.S. District Court in Manhattan, Bankman-Fried—who was also ordered on Thursday to forfeit over $11 billion—said of his collapsed company that he “built something beautiful” and “threw it all away,” saying his decisions leading up to its downfall “haunt [him] every day,” according to transcriptions from multiple outlets.
- Bankman-Fried apologized to former FTX customers, saying “a lot of people feel really let down” and that he is “sorry about what happened at every stage”—prosecutors alleged Bankman-Fried stole FTX user funds in a scheme to pay the exchange’s sister firm, Alameda.
- Bankman-Fried acknowledged Thursday that “Alameda was in danger of falling apart,” admitting he “made a lot of mistakes” and that “customers weren’t paid back.”
- Lawyers for Bankman-Fried have said they will appeal both his conviction and sentence.
Crucial Quote
“It doesn’t matter why things go bad, if you’re the CEO it’s on you,” Bankman-Fried said on Thursday, adding: “I’m not the one that matters at the end of the day—it’s the customers and employees affected that matter.”
Key Background
FTX, a Bahamas-based exchange, propelled Bankman-Fried’s into the national spotlight, making him crypto’s golden boy, whose company rode the burgeoning crypto wave, landing Super Bowl commercials and major naming deals, including Miami’s now-renamed FTX Arena. That fame turned on its head in late 2022, after rival Binance suddenly walked back on a deal to buy FTX and as investors grew suspicious of the exchange.
A bombshell CoinDesk report in November 2022 indicated FTX sister trading firm Alameda relied on FTX funds to cover its expenses, while Forbes reported Alameda had been losing billions of dollars between 2021 and 2022. FTX later filed for bankruptcy and Bankman-Fried was charged with eight criminal counts, including money laundering and conspiracy for allegedly diverting customer funds to Alameda.
Contra
Lawyers representing Bankman-Fried had requested a lighter five to six-year sentence, arguing the collapsed company had vowed to return money to its customers, though New York District Court Judge Lewis Kaplan slammed that argument as “logically flawed” and “misleading.”
Bankman-Fried had previously denied improperly using FTX customers’ funds, telling ABC’s “Good Morning America” in December he wished he had taken a “lot more responsibility” over the lead-up to FTX’s sudden collapse, admitting the “proper oversight” at the company was lacking. Kaplan determined in Thursday’s hearing that FTX customers lost $8 billion as a result of the scheme, while its investors lost approximately $1.7 billion and its lenders lost $1.3 billion.
