Fallen crypto titan Sam Bankman-Fried sentenced to 25 years

A federal judge on Thursday sentenced Sam Bankman-Fried to 25 years in prison for his leading role in one of the biggest financial scandals in American history, capping the stunning fall of the former cryptocurrency magnate and one-time Washington megadonor.

Judge Lewis Kaplan of the Southern District of New York handed down the sentence almost five months after a jury found Bankman-Fried, 32, guilty of orchestrating a massive fraud centered on his crypto empire. Bankman-Fried was also ordered to pay $11 billion.

Bankman-Fried faced a maximum of 110 years in prison, though prosecutors had pressed for 40 to 50 years. His attorneys had argued that he should be sentenced to five to seven years.

Just two years ago, Bankman-Fried was the biggest name in crypto and an up-and-comer in campaign-finance circles, raising millions from Silicon Valley investors and speaking of one day owning Goldman Sachs. In Washington, he pushed to sway crypto regulatory debates and donated lavishly to political campaigns in both the 2020 and 2022 elections.

"The goal was power and influence," Kaplan said at the sentencing hearing, while discussing what he called Bankman-Fried's "act" to be "the good guy" of crypto.

Now, his prison term is a reminder of the stakes in prosecutors’ ongoing crackdown on the crypto market.

“Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice,” Attorney General Merrick Garland said in a statement following the sentencing.

Since Bankman-Fried’s crypto exchange FTX collapsed, federal authorities have accelerated their clampdown on the industry with charges against several other prominent executives and firms alleging fraud and the facilitation of money laundering, including for the purposes of terrorism and narcotics trafficking.

At the same time, the Securities and Exchange Commission and the Commodity Futures Trading Commission have swept through the market with civil cases against some of the largest crypto companies.

Bankman-Fried was found guilty of seven counts of fraud and conspiracy tied to the operations of the now-defunct FTX. Prosecutors alleged, among other things, that he siphoned billions of dollars in customer money to finance his lifestyle, a sweeping political influence campaign and risky bets by Alameda Research, a crypto trading firm he founded prior to FTX.

In turn, the FTX founder became the face of crypto. Often wearing a t-shirt, shorts and sneakers, Bankman-Fried spoke at conferences alongside the likes of former President Bill Clinton and former U.K. Prime Minister Tony Blair. His picture was plastered across advertisements and on magazine covers, as FTX swelled into one of the world’s largest crypto companies with its eyes set on traditional finance. And Bankman-Fried touted the goal of giving away his mounting fortune.

A pillar of his activity revolved around Washington and shaping the future of crypto policy, an effort that came as the market sought legitimacy from both lawmakers and regulators.

Bankman-Fried hired several former regulators to help FTX navigate agencies like the SEC and CFTC, as well as Capitol Hill. He regularly met with lawmakers charged with overseeing the agencies. And he handed out millions in campaign contributions — emerging as a new financial force in the nation’s capital.

He was among the top financial backers of now-President Joe Biden in 2020. Bankman-Fried later donated almost $40 million to super PACs and campaigns during the 2022 midterms, mostly to Democrats. Kaplan said Thursday that the donations extended to the right as well "through straws that wouldn't come back to him."

At the sentencing hearing, Bankman-Fried apologized for the fallout of FTX's collapse and said he "made a series of bad decisions" while running the company.

"I'm sorry about what happened at every stage, things I should have done and said, things I shouldn't have," he said. "I failed everyone that I care about and everything that I care about too."

But Kaplan said that while Bankman-Fried has acknowledged the mistakes he has yet to say "a word of remorse for the commission of terrible crimes."

"He knew it was wrong," Kaplan said. "He knew it was criminal, he regrets he made a very bad bet about the likelihood of getting caught, but he's not going to admit anything, as is his right."

The 25-year sentence — which would put Bankman-Fried in his late 50s upon release — was of little surprise to former federal prosecutors.

"It's just a giant fraud," said Daniel Silva, a former federal prosecutor who is now a shareholder at Buchalter, a law firm. "The amounts are so significant that you're looking at a sentence over 20 years."

U.S. Attorney for the Southern District of New York Damian Williams called the fraud “unprecedented.”

“His deliberate and ongoing lies demonstrated a brazen disregard for customers’ expectations and disrespect for the rule of law, all so that he could secretly use his customers’ money to expand his own power and influence,” Williams said in a statement. “The scale of his crimes is measured not just by the amount of money that was stolen, but by the extraordinary harm caused to victims, who in some cases had their life savings wiped out overnight.”

Mark Botnick, a spokesperson for Bankman-Fried, confirmed that there are still plans to appeal the November verdict.

“We are heartbroken and will continue to fight for our son,” Bankman-Fried’s parents — Joseph Bankman and Barbara Fried — said in a statement shared by Botnick.

Bankman-Fried’s attorneys had urged Kaplan to impose a lighter sentence before his ruling. In briefs to the court, they wrote that a sentence of 63 to 78 months would allow him to still “lead a meaningful life and contribute to the neediest in society.” They cited the case of Michael Milken, the so-called Junk Bond King of the 1980s who pleaded guilty to conspiracy and fraud and ultimately served two years in prison.

Milken has since become a prominent philanthropist.

For crypto critics, the Bankman-Fried case has been a harbinger of the dangers they see lurking within the nearly $3 trillion market and a warning of the need for companies to fall in line with the rules of agencies like the SEC.

“Today’s sentencing of SBF to 25 years in prison sends a message to the entire industry, especially the crypto kingpins, that the law applies to them, as it must, and that even crypto crooks will do hard time for their crypto crimes,” Better Markets CEO Dennis Kelleher said.

Sen. Elizabeth Warren (D-Mass.) used Bankman-Fried's sentencing as a chance to double down on the need for tougher crypto rules.

"It's time white collar criminals are held to account, but lawmakers are still pushing [Bankman-Fried's] schemes," wrote Warren, a vocal skeptic of the crypto industry, in a post on X, formerly known as Twitter. "We need tough rules to crack down on crypto crime."

Yet, despite Bankman-Fried's one-time power over the market, the crypto world has largely shrugged off his case.

Executives and lobbyists have instead pushed to distance the high-flying industry from Bankman-Fried’s crimes. His misdeeds, they say, were not an issue of crypto as much as they were outright fraud.

"Fraud is fraud, whether it's involving crypto or other assets," said Andrey Spektor, a former federal prosecutor and current partner at law firm Bryan Cave Leighton Paisner. "You can't lie to people, and that's really what the bottom line is."