Sam Bankman-Fried Sentenced to 25 Years In Prison For His FTX

Sam Bankman-Freed, the disgraced founder of crypto exchange FTX, was sentenced to 25 years on Thursday after he was found guilty last fall of fraud following the collapse of his company in late 2022. Bankman-Freed was convicted in November on seven counts of wire fraud and conspiracy to commit wire fraud, commodities fraud, securities fraud, money laundering, defraud the Federal Elections Commission, and commit campaign finance violations.

Prosecutors previously asked New York District Court Judge Lewis Kaplan to sentence Bankman-Freed from 40 to 50 years in prison, but he faced a statutory maximum sentence of 110 years. At the hearing on Thursday, Kaplan determined that FTX’s customers lost $8 billion, its investors lost $1.7 billion, and its lenders lost $1.3 billion. Bankman-Freed’s lawyers asked Kaplan for a lighter sentence of 5 to 6 years in prison because FTX promised to return the money customers lost, but Kaplan dismissed this promise on Thursday, calling the repayment “misleading, logically flawed, and speculative,” Reuters reported.

Kaplan also found that Bankman-Freed gave perjured testimony when he told the court he had no knowledge that Alam Research spent customer funds from FTX and said Bankman-Freed committed witness tampering at least twice. Bankman-Freed’s attorneys previously said they plan to appeal his conviction. Bankman-Freed founded his crypto-focused trading firm, Alam Research, in 2017.

He later founded the exchange FTX in 2019 and served as its CEO. Bankman-Freed rode the wave of crypto enthusiasm as bitcoin’s price began breaking records in 2021 and 2022, quickly amassing a fortune that Forbes valued at $24 billion in 2022 before his rapid fall from grace. His empire fell apart in November 2022 after a report from CoinDesk shed light on irregularities on Alam’s balance sheet. Forbes later reported Alam Research was losing billions since at least 2021.

Prosecutors accused Bankman-Freed of using customer funds from FTX to prop up Alam Research, which would make increasingly risky bets. Bankman-Freed was arrested that December and extradited from his home in the Bahamas. He was placed on house arrest but was ordered to report to jail in August.

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