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Samuel Bankman-Fried will head to prison for 25 years for scamming crypto investors out of $8billion – despite his apologies and pleas for a lighter sentence. ‘A lot of people feel really let down and they were very let down. I’m sorry about that. I’m sorry about what happened at every stage,’ Bankman-Fried said. ‘Things I should have done, things I shouldn’t have.’
Judge Lewis Kaplan said the 32-year-old FTX founder – commonly known as SBF – was being sentenced to 300 months and forfeit more than $11billion. The judge also blasted him for committing perjury three times during the October trial that saw him convicted by a jury. The prosecution wanted the disgraced crypto exec to spend 40 to 50 years behind bars, while the defense was asking for a much more lenient sentence of no greater than six and a half years.
Judge Lewis Kaplan was quick to bash Bankman-Fried during the hearing and noted the fraudster committed perjury multiple times during a trial that saw him convicted on all counts by a jury. He also called Bankman-Fried a ‘thief’ who ‘is not entitled’ to a lighter sentence. The judge also ripped Bankman-Fried’s claims that investors could get their money back despite the fraud. One of the 200 victims scammed by Sam Bankman-Fried testified about the ‘nightmare’ they have endured.
Bankman-Fried paid little attention to the victims as they testified – despite his later apology to victims and FTX employees – and also ignored his parents who sat in the gallery as the fraudster entered the courtroom. ‘I have new baby son and older and have spoken to tens of thousands of victims like myself who have had their dreams destroyed,’ victim Sunii Kavuri said. ‘My house, the money I wanted to spend on a family home was taken away as well as my children’s education.’ Kavuri said he disputed the idea that FTX customers would get all their money back. Judge Kaplan agreed and said that would be ‘incorrect’.
‘All the creditors continue to suffer, not only monetary loss, but emotional and mental distress,’ Kavuri said. ‘People are on medication, recovering, mental health issues, depression and sadly at least three people I’ve heard of have committed suicide as a result of this FTX fraud.’ The judge, in his opening remarks, quickly dismissed the idea that Bankman-Fried deserves a lighter sentence because FTX customers didn’t lose anything in the fraud.
‘The defendant’s argument hinges on what amounts to an assumption that customers of FTX are going to be made whole in the bankruptcy,’ the judge said. ‘Even if that were true they would not be entitled to a reduction of the loss amount (of sentence). The defendant’s assertion that FTX customers and creditors will be paid in full is misleading ‘It is logically flawed, it is speculative.’ The judge said it made no difference that cryptocurrencies had gone up in value since FTX went bankrupt in November 2022. This, in part, makes it likelier that FTX victims could be repaid in full through the bankruptcy process.
‘The fact that a combination of successes in some of those investments, persistence by the current leadership of the FTX bankruptcy estate in clawing back stolen assets and fortuitous but radical run-up in the value of some crypto currencies might result in benefit to some creditors, it bears no logical reactions to the gravity of the crime that were committed.’ The judge then delivered a blunt assessment of his view in the case that cost investors $1.7billion.
‘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 winnings to pay back what he stole if he gets caught. The judge noted that Bankman-Fried perjured himself three times during trial and that the felon committed witness tampering. Kaplan ruled Bankman-Fried’s sentence should be increased because of his efforts to obstruct justice.
The judge also ruled that Bankman-Fried’s texts to the former counsel of FTX ‘did constitute attempted witness tampering and a judgement is warranted on that alone’. The judge made three findings of perjury in addition and said Bankman-Fried willfully and materially committed’ it.
He committed perjury in relation to the claim that until the Fall of 2022 he had no knowledge Alameda had spent FTX customer deposits, Judge Kaplan said. Judge Kaplan said: ‘He testified falsely that he first learned Alameda had a roughly $8bn liability to FTX in October 2022. ‘He falsely testified that he did not know repayment of third party loans to Alameda in June 20202 would require Alameda to borrow more customer funds’.
