Sam Bankman-Fried, founder of the cryptocurrency platform FTX, which went bust in the fall of 2022, was sentenced on Thursday, March 28, to 25 years in prison by New York judge Lewis A. Kaplan, who also ordered him to pay $11 billion to the government. Federal prosecutors had requested between 40 and 50 years imprisonment: "He stole money from customers who entrusted it to him, he lied to investors, he sent fabricated documents to lenders, he pumped millions of dollars in illegal donations into our political system and he bribed foreign officials. Each of these crimes is worthy of a lengthy sentence."
Lawyers for the 32-year-old were arguing for a maximum of six and a half years' imprisonment. "Sam is not the evil genius depicted in the media or the greedy villain described at trial," said his lawyer, portraying his client as "a first-time, non-violent offender." Most importantly, according to the defense, the clients are in the process of recovering most of their funds.
Indeed, since the trial, crypto-currencies have emerged from their "financial winter," with bitcoin breaking new records with a price in excess of $70,000. As a result, the assets managed by liquidator John Ray have soared, and he may be able to compensate most of FTX's creditors. According to CNBC, he may have recovered as much as $7 billion. Among FTX's assets was its 8% stake in artificial intelligence start-up Anthropic, in which Bankman-Fried had invested $500 million and which could be sold for $884 million.
The judge refuted these estimates, stating that he had found a loss of $1.7 billion for investors in FTX, a loss of $1.3 billion for lenders to its Alameda subsidiary and a loss of $8 billion for FTX customers. Above all, he refused to consider the argument. "A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on his sentence," assailed Judge Kaplan, who extended his grievances by accusing Bankman-Fried of attempting to tamper witnesses and committing perjury during the trial. The maximum possible sentence was 110 years in prison.
The trial, which opened in early October 2023, went very badly for this entrepreneur, whose fortune was still estimated at $26 billion in 2022. First, Bankman-Fried appeared in custody, his bail having been revoked by the courts this summer for having attempted to influence Caroline Ellison, his former girlfriend. Ellison was the head of Alameda, the FTX subsidiary that orchestrated all the fraudulent speculation using FTX clients' funds from the Bahamas.
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