U.S. District Choose Lewis Kaplan handed down the sentence at a Manhattan court docket listening to after rejecting Bankman-Fried’s declare that FTX prospects didn’t truly lose cash and accusing him of mendacity throughout his trial testimony. A jury discovered Bankman-Fried, 32, responsible on Nov. 2 on seven fraud and conspiracy counts stemming from FTX’s 2022 collapse in what prosecutors have referred to as one of many largest monetary frauds in U.S. historical past.
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“He knew it was mistaken,” Kaplan mentioned of Bankman-Fried earlier than handing down the sentence. “He knew it was felony. He regrets that he made a really unhealthy guess concerning the chance of getting caught. However he isn’t going to confess a factor, as is his proper.”
Bankman-Fried stood along with his arms clasped earlier than him as Kaplan learn the sentence.
Bankman-Fried, sporting a beige short-sleeve jail t-shirt, acknowledged throughout 20 minutes of remarks to the choose that FTX prospects had suffered and he supplied an apology to his former FTX colleagues.
The sentence marked the fruits of Bankman-Fried’s plunge from an ultra-wealthy entrepreneur and main political donor to the most important trophy to this point in a crackdown by U.S. authorities on malfeasance in cryptocurrency markets. Bankman-Fried has vowed to enchantment his conviction and sentence.
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Kaplan mentioned he had discovered that FTX prospects misplaced $8 billion, FTX’s fairness traders misplaced $1.7 billion, and that lenders to the Alameda Analysis hedge fund Bankman-Fried based misplaced $1.3 billion. “The defendant’s assertion that FTX prospects and collectors might be paid in full is deceptive, it’s logically flawed, it’s speculative,” Kaplan mentioned. “A thief who takes his loot to Las Vegas and efficiently bets the stolen cash just isn’t entitled to a reduction on the sentence through the use of his Las Vegas winnings to pay again what he stole.”
The choose additionally mentioned Bankman-Fried’s lied throughout his trial testimony when he mentioned he didn’t know that his hedge fund had spent buyer deposits taken from FTX.
Federal prosecutors had sought a jail sentence of 40 to 50 years. Bankman-Fried’s protection lawyer Marc Mukasey had argued {that a} sentence of lower than 5-1/4 years can be applicable.
Addressing the choose, Bankman-Fried mentioned, “Clients have been struggling… I did not in any respect imply to attenuate that. I additionally suppose that is one thing that was lacking from what I’ve mentioned over the course of this course of, and I am sorry for that.”
Referring to his FTX colleagues, Bankman-Fried instructed the choose, “They put loads of themselves into it, and I threw that every one away. It haunts me day-after-day.”
Three of his former shut associates testified as prosecution witnesses at trial that he had directed them to make use of FTX buyer funds to plug losses at Alameda Analysis.
Nicolas Roos, a prosecutor with the U.S. Legal professional’s workplace in Manhattan, instructed the choose, “The criminality right here is huge in scale. It was pervasive in all points of the enterprise.”
Throughout the listening to, Mukasey sought to distance his shopper from infamous fraudsters like Bernie Madoff.
“Sam was not a ruthless monetary serial killer who set out each morning to harm individuals,” Mukasey mentioned, describing his shopper as an “awkward math nerd” who labored exhausting to get prospects their a refund after FTX’s collapse.
“Sam Bankman-Fried does not make selections with malice in his coronary heart,” Mukasey added. “He makes selections with math in his head.”
Bankman-Fried testified in his personal protection that he made errors resembling not implementing a danger administration crew, however denied he meant to defraud anybody or steal prospects’ cash.
He was led into the courtroom for the listening to by members of the U.S. Marshals Service. His dad and mom, Stanford College regulation professors Joseph Bankman and Barbara Fried, attended.
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A Massachusetts Institute of Expertise graduate, Bankman-Fried rode a increase within the values of bitcoin and different digital belongings to a web price of $26 billion, in accordance with Forbes journal, earlier than he turned 30.
Bankman-Fried grew to become recognized for his mop of unkempt curly hair and dedication to a motion referred to as efficient altruism, which inspires proficient younger individuals to deal with incomes cash and giving it away to worthy causes. He additionally was one of many largest contributors to Democratic candidates and political causes forward of the 2022 U.S. midterm elections.
However prosecutors have mentioned the accountable picture he cultivated hid his years-long embezzlement of buyer funds.
A number of FTX prospects have written to Kaplan expressing dismay that they are going to be compensated based mostly on the worth of their cryptocurrency on the time of FTX’s chapter, relatively than the upper ranges at which these belongings presently commerce.
Bankman-Fried has been detained on the Metropolitan Detention Heart in Brooklyn since August 2023, when Kaplan revoked his bail after discovering he doubtless tampered with witnesses not less than twice.
(Reporting by Luc Cohen in New York; Enhancing by Will Dunham, Noeleen Walder and Daniel Wallis)
