Crypto Exchange Founder Gets 25 Years for $8B Theft

Sam Bankman-Fried has received a 25-year prison term for embezzling $8 billion from clients of FTX, the defunct cryptocurrency platform he established, reports Finextra. Following a widely publicized trial in Manhattan federal court last November, Bankman-Fried was convicted on seven charges in one of the largest financial fraud cases in history.

Prosecutors had recommended a 40 to 50-year imprisonment, while Bankman-Fried's attorney advocated for less than five and a quarter years.

Prior to the sentencing, US District Judge Lewis Kaplan remarked, "He was aware of the illegality of his actions. He acknowledges his grave error in underestimating the risk of detection. However, he refuses to confess, exercising his legal right." The judge determined that FTX customers suffered an $8 billion loss, while equity investors incurred a $1.7 billion loss, and lenders to Bankman-Fried's Alameda Research hedge fund faced a $1.3 billion loss.

Kaplan criticized Bankman-Fried's claim that FTX customers and creditors would be fully reimbursed, labeling it as misleading, illogical, and speculative. He analogized Bankman-Fried's actions to a thief using stolen funds to gamble in Las Vegas, asserting that any subsequent winnings did not mitigate the severity of the crime.

Describing Bankman-Fried's trial testimony as "evasive" and "hair-splitting," Kaplan expressed astonishment, stating, "I have never encountered such behavior in court."

Bankman-Fried expressed remorse, acknowledging, "Many individuals feel deeply disappointed, and rightfully so. I regret the entirety of the events that unfolded."