25-Year Prison Sentence Instead of 100 for Largest Crypto Scammer Sam Bankman-Fried for Stealing Billions from FTX Clients
US District Judge Lewis Kaplan yesterday sentenced 32-year-old Sam Bankman-Fried to 25 years in prison for stealing $8 billion from customers of the cryptocurrency exchange FTX, which he founded and is now bankrupt, CNBC reports.
At his sentencing in Manhattan federal court, Bankman-Fried was also ordered to pay $11 billion in forfeitures.
This was the end of the former billionaire prodigy's case.
Instead of the maximum 110 years in prison that the fraudster faced on all charges, the judge decided on 25 years in prison and confiscation at the hearing in Manhattan. The judge also found that the defendant had lied during his testimony that FTX clients had not actually lost their money.
The jury found Benkman-Fried guilty on 2 November on seven counts of fraud and conspiracy related to the FTX collapse in 2022, which prosecutors called one of the largest financial frauds in US history.
In turn, Damian Williams, the U.S. Attorney for the Southern District of New York, said in a statement that the 25-year sentence for Benkman-Fried will "deter the defendant from committing fraud again and sends an important message to others who may be tempted to engage in financial crime fraud that justice will be swift and the consequences severe."
According to the judge, Benkman-Fried, who is currently being held at the Metropolitan Detention Centre in Brooklyn, will be sent to a low- or medium-security prison, likely to be located near his parents' home in the San Francisco Bay Area.
The verdict marks the end of a wide-ranging fraud case that has exposed the rampant volatility and risks in the loosely regulated world of cryptocurrencies. In November 2022, FTX collapsed almost instantly, wiping out $8 billion in customer savings.
The FTX was one of the largest cryptocurrency markets, an easy-to-use platform where investors could exchange dollars or euros for digital coins such as bitcoin and ether. Its valuation was north of $30 billion.
But in November 2022, in less than a week, an $8 billion hole was discovered in the deposits of FTX accounts.
Benkman-Fried resigned, handing over the reins to a group of lawyers. They immediately filed for bankruptcy.
The following month, Benckman-Fried was arrested at his luxury apartment in the Bahamas and accused of stealing client money to fund billions in political contributions, charitable donations, and investments in other startups.
A few months later, three of Benckman-Fried's top deputies, including an ex-girlfriend, pleaded guilty to fraud and agreed to cooperate with prosecutors.