Bankman-Fried gets 25 years in prison for FTX fraud

Bankman-Fried gets 25 years in prison for FTX fraud
'There is a risk that this man will be in a position to do something very bad in the future,' the judge says. 'And it’s not a trivial risk. Not a trivial risk at all.'
MAR 28, 2024
By  Bloomberg

FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison for stealing billions of dollars from customers, marking the final chapter in a case that has both captivated and overshadowed the crypto industry. 

US District Judge Lewis A. Kaplan delivered the sentence in federal court in Manhattan moments after Bankman-Fried said he was “sorry about what happened at every stage.” He faced as long as 110 years behind bars after being convicted last year of seven offenses, including fraud and conspiracy. 

The one-time billionaire became a symbol of malfeasance and greed in the crypto world after his hugely popular FTX exchange collapsed, exposing a years-long fraud that swindled about $10 billion from customers. Bankman-Fried, 32, had denied knowingly committing fraud and claimed he and his crypto empire were victims of market downturns in 2022.

Kaplan dismissed Bankman-Fried’s 20-minute statement, saying he wasn’t truly remorseful, and focused instead on the severity of the crime.

“There is a risk that this man will be in a position to do something very bad in the future,” Kaplan said. “And it’s not a trivial risk. Not a trivial risk at all.”

In addition to the prison sentence, Kaplan said that Bankman-Fried should forfeit more than $11 billion. 

At trial, prosecutors said Bankman-Fried siphoned billions of dollars from FTX to its sister hedge fund, Alameda Research, to spend on speculative investments, more than 300 political donations, and expensive real estate. 

Faced with market volatility, lenders began asking for their money in 2022 and Bankman-Fried used FTX customer funds to pay them back. But a rush of customer withdrawals culminated in FTX filing for bankruptcy in November 2022, and Bankman-Fried stepping down as chief executive. 

Ric Edelman explains the collapse of FTX, world’s second-largest crypto platform

Latest News

FINRA suspends Centaurus broker who piled clients into REITS, BDCs
FINRA suspends Centaurus broker who piled clients into REITS, BDCs

Most firms place a limit on advisors’ sales of alternative investments to clients in the neighborhood of 10% a customer’s net worth.

Advisor moves: LPL Financial, Osaic, Raymond James all welcome new teams
Advisor moves: LPL Financial, Osaic, Raymond James all welcome new teams

Those jumping ship include women advisors and breakaways.

Mariner announces an acquisition double, adding $1.7B to its AUA
Mariner announces an acquisition double, adding $1.7B to its AUA

Firms in New York and Arizona are the latest additions to the mega-RIA.

Michigan insurance agent to stand trial after charges of insurance fraud
Michigan insurance agent to stand trial after charges of insurance fraud

The agent, Todd Bernstein, 67, has been charged with four counts of insurance fraud linked to allegedly switching clients from one set of annuities to another.

NY Appeals court tosses $500M civil fraud penalty against Trump; upholds injunctive relief
NY Appeals court tosses $500M civil fraud penalty against Trump; upholds injunctive relief

“While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award to the State,” Justice Peter Moulton wrote, while Trump will face limits in his ability to do business in New York.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.