A US federal judge in the Southern District of New York has sentenced Sam Bankman-Fried, founder of bankrupt crypto exchange FTX, to 25 years in prison.
Last November, at the end of a month-long trial, Bankman-Fried—known colloquially as SBF—was found guilty of seven counts of fraud and conspiracy in connection with the collapse of FTX.
The exchange had fallen to pieces in November 2022 after running dry of funds with which to process customer withdrawals. The money was missing, the jury concluded, because Bankman-Fried had conducted an elaborate fraud whereby billions of dollars’ worth of user funds was swept into a sibling company and used to bankroll high-risk trading, venture bets, debt repayments, personal loans, political donations, and a lavish life in the Bahamas.
In a court filing, the US government described the affair as “one of the largest financial frauds in history.” Bankman-Fried had demonstrated “unmatched greed and hubris” and a “brazen disrespect for the rule of law,” it said.
The sentencing completes a remarkable fall from grace. Between 2019 and 2022, Bankman-Fried steered FTX to a $32 billion dollar valuation, becoming for a time the world’s youngest self-made billionaire. The 32-year-old fraternized with regulators, politicians, sports stars, and supermodels. He won the adoration of venture capitalists, who fawned over him, and the media, which lionized him as the “next Warren Buffett” and the “Michael Jordan of crypto.” Privately, Bankman-Fried reportedly told others that he aspired to be the President of the United States.
For the coming decades, Bankman-Fried will be consigned to a far less illustrious life in prison.
In considering the appropriate sentence for Bankman-Fried, the judge was required to take into account a blend of factors beyond the details of the underlying crimes. Those include the extent of the financial losses dealt upon the victims, the defendant’s character and history, whether any obstruction of justice had taken place, the likelihood of recidivism, and so forth.
“The defendant is considered as a whole by the court—for his good and his bad,” says Joshua Naftalis, a former US prosecutor and partner at law firm Pallas Partners. If the objective at trial is to assess a “snapshot” of someone’s behavior, he says, the aim of sentencing is to “take a full measure of the man.”
The prosecution had requested a sentence of up to 50 years, while Bankman-Fried’s legal counsel had petitioned the court for leniency. Those who cast their client as an “ice-cold manipulator” or “man with no morals,” the defense wrote, “don’t know the true Sam Bankman-Fried.” They emphasized his history of philanthropy, his veganism, and his anhedonia—a condition that ostensibly means he is unable to feel happiness.
The defense’s court filing was supplemented with letters from Bankman-Fried’s family members and various associates, testifying to his good character, remorse, and utilitarian ideals. “The public perception of Sam could not be further from the truth,” wrote Barbara Fried, his mother. “Being consigned to prison for decades will destroy Sam as surely as would hanging him, because it will take away everything in the world that gives his life meaning.”