Sam Bankman-Fried, the former CEO of crypto startup FTX, was sentenced to 25 years in prison after being found guilty of fraud and conspiracy. The sentence was lower than the 40 to 50 years sought by prosecutors, with Judge Lewis Kaplan considering factors such as the brazenness of the crimes and the potential for future criminal behavior. Bankman-Fried may serve as little as 12.5 years with good behavior. The judge recommended placement in a medium-security facility near San Francisco for family visitation.
During his hearing, Bankman-Fried offered a statement acknowledging his mistakes and expressing regret for throwing away what he and his business partners had built. However, Judge Kaplan was unmoved by Bankman-Fried’s apology, noting the lack of remorse for committing crimes that harmed customers. The defendant was ordered to forfeit $11 billion in assets acquired with stolen customer funds, with the intention of using these assets to help repay victims of the FTX collapse.
Bankman-Fried’s argument that former FTX customers would not experience losses due to potential funds recoupment was rejected by Judge Kaplan as misleading and speculative. The company is now under the care of corporate restructuring expert John J. Ray III, who stated in a letter to the court that the company left behind by Bankman-Fried was neither solvent nor safe. Recovered assets to repay victims were attributed to the diligence of Ray’s team in the past 18 months.
The judge acknowledged Bankman-Fried’s acknowledgment of the harm caused to customers but pointed out his lack of remorse for committing crimes. The $11 billion in forfeited assets will follow Bankman-Fried for life, potentially taking the majority of his earnings after release from prison. The funds will be used to help repay victims of the FTX collapse. Despite arguments that customers would not incur losses, Judge Kaplan emphasized the speculative nature of this claim and highlighted the work done by Ray and his team in recovering assets for the benefit of victims.
