Sam Bankman-Fried: Disgraced ‘crypto king’ jailed for 25 years after stealing billions of dollars from FTX customers
Disgraced crypto entrepreneur Sam Bankman-Fried has been sentenced to 25 years in prison after being convicted of stealing billions of dollars from his customers.
He was the chief executive of FTX, which suddenly went bankrupt in November 2022 – leaving millions of users frozen out of their accounts and unable to make withdrawals.
The 32-year-old American could have faced up to 100 years behind bars – but last month, his lawyers argued such a sentence would have been “barbaric” and a five-year term would be more appropriate.
Initial reports said he had been sentenced to 20 years – but this has since been corrected to 25.
Prosecutors had asked the judge to jail Bankman-Fried for 40 to 50 years, arguing the public needed protecting from the fraudster and a harsh punishment would deter other criminals.
“The defendant victimised tens of thousands of people and companies, across several continents, over a period of multiple years,” prosecutors said in a court filing.
“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.”
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Prosecutors also said Bankman-Fried had cost customers, investors and lenders over $10bn (£7.9bn) by misappropriating funds to fuel his quest for influence and dominance in the new industry, and had illegally used money from FTX depositors to cover his expenses, which included purchasing luxury properties in the Caribbean, alleged bribes to Chinese officials and private planes.
At the sentencing hearing in Manhattan, Judge Lewis Kaplan said the businessman lied on the witness stand when he insisted he had no knowledge of customer funds being used this way.
The judge also described Bankman-Fried’s claim that victims will be paid back in full as “misleading and logically flawed”.
“A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back what he stole,” Judge Kaplan warned.
The judge said that the sentence reflected “a risk that this man will be in a position to do something very bad in the future”.
“And it’s not a trivial risk at all.”
He added that it was “for the purpose of disabling him to the extent that can appropriately be done for a significant period of time”.
Before he was sentenced, Mr Bankman-Fried apologised in a rambling statement.
Sam Bankman-Fried leaving court last July. Pic: Reuters
“A lot of people feel really let down. And they were very let down. And I’m sorry about that. I’m sorry about what happened at every stage,” he said.
“My useful life is probably over. It’s been over for a while now, from before my arrest.”
Judge Kaplan said he would advise the Federal Bureau of Prisons to send him to a medium-security prison or less near the San Francisco area because he’s unlikely to be a physical threat to other inmates or prison staff, and his autism and social awkwardness would make him vulnerable to other inmates in a high-security location.
Read more:
The meteoric rise and even sharper fall of Sam Bankman-Fried
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It took just five-and-a-half hours for a jury in New York to convict him of two counts of fraud and five of conspiracy last November.
Three people from Bankman-Fried’s inner circle – including his former girlfriend Caroline Ellison – pleaded guilty to related crimes and testified at his trial.
Sam Bankman-Fried’s colleague and on-off girlfriend Caroline Ellison testified against him. Pic: Reuters
Bankman-Fried’s conviction followed a dramatic fall from grace from his time as chief executive of FTX – the second-largest cryptocurrency exchange in the world at one time – when he was worth billions of dollars on paper.
FTX allowed investors to buy dozens of virtual currencies, from Bitcoin to more obscure ones like Shiba Inu Coin.
Pic: Reuters
Flush with billions of dollars of investors’ cash, Bankman-Fried rode a crest of success that included a Super Bowl advertisement and celebrity endorsements from stars like quarterback Tom Brady, basketball star Stephen Curry and comedian Larry David.
But after the collapse of cryptocurrency prices in 2022, Bankman-Fried tried to plug the holes in the balance sheet of FTX’s hedge fund affiliate, known as Alameda Research.
Bankman-Fried’s victims – an estimated 80,000 of whom are based in the UK – remain out of pocket, with some losing their life savings.
Prosecutors described his crimes as one of the biggest financial frauds in US history.
US
Trump criticises Biden’s death row decisions – saying he backs capital punishment for ‘rapists, murderers, and monsters’
Donald Trump says that when he takes power next month he will direct the US Justice Department to “vigorously pursue” the death penalty.
The US president-elect, 78, said he would do so to protect Americans from what he called “violent rapists, murderers and monsters”.
Mr Trump was responding to President Joe Biden’s decision to commute the sentences of almost all federal inmates on death row – whom Mr Trump called “37 of the worst killers in our country”.
“When you hear the acts of each, you won’t believe that he did this. Makes no sense,” Mr Trump posted on his social media platform Truth Social.
“Relatives and friends are further devastated. They can’t believe this is happening!”
He continued: “As soon as I am inaugurated, I will direct the Justice Department to vigorously pursue the death penalty to protect American families and children from violent rapists, murderers, and monsters.
“We will be a Nation of Law and Order again!”
President Biden, 82, announced on Monday that he would reduce the sentences of 37 of the 40 federal death row prisoners to life in prison without the possibility of parole, saying he was “guided by my conscience and my experience as a public defender”.
The three others the president did not spare are Robert Bowers, who fatally shot 11 people at a Pittsburgh synagogue in 2018; Dylann Roof, who gunned down nine black churchgoers in Charleston, South Carolina, in 2015; and Dzhokhar Tsarnaev, who carried out a 2013 bombing at the Boston Marathon that killed three people and injured almost 300 others.
(L-R) Robert Bowers, Dylann Roof and Dzhokhar Tsarnaev
‘I condemn these murderers’
Despite sparing the lives of 37, Mr Biden added: “Make no mistake: I condemn these murderers, grieve for the victims of their despicable acts, and ache for all the families who have suffered unimaginable and irreparable loss.”
During Mr Trump’s first term in office between 2017 and 2021, the US Justice Department put 13 federal inmates to death.
He has since said he would like to expand capital punishment to include child rapists, migrants who kill US citizens and law enforcement officers, and those convicted of drug and human trafficking.
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Denmark to boost Greenland’s defence
Pic: Reuters
Mr Biden, who ran for president opposing the death penalty, put federal executions on hold when he took office in January 2021.
His latest decisions come after a coalition of criminal justice advocacy groups, former prosecutors and business leaders wrote letters to the White House asking for Mr Biden to commute the sentences ahead of Mr Trump’s inauguration on 20 January.
Pope Francis also appealed to Mr Biden, who is Catholic, to reduce the sentences to imprisonment.
Unlike executive orders, clemency decisions cannot be reversed by a president’s successor, although the death penalty can be sought more aggressively in future cases.
Denmark has announced plans to boost its defence spending for Greenland with a “stronger presence in the Arctic” – a few hours after Donald Trump repeated his call for the US to buy the vast island.
Danish defence minister Troels Lund Poulsen said the package would amount to a “double-digit billion amount” in krone, or at least $1.5bn (£1.2bn).
He told the Jyllands-Posten newspaper the money would be used to buy two inspection ships, two long-range drones and two sled dog teams as well as more personnel for Denmark’s Arctic Command in the capital Nuuk.
Denmark will also upgrade the Kangerlussuaq Airport so that it can handle F-35 fighter jets.
Donald Trump has restated his desire for the US to control Greenland. Pic: Reuters
Greenland, which sits between the Atlantic and Arctic oceans, is 80% covered by an ice sheet and is home to a large US military base.
The world’s biggest island, whose capital is closer to New York than the Danish capital Copenhagen, has mineral, oil and natural gas wealth.
But development has been slow, leaving its economy reliant on fishing and annual subsidies from Denmark.
“For many years, we have not invested sufficiently in the Arctic, now we are planning a stronger presence,” Mr Poulsen said.
He called the timing of the announcement an “irony of fate”, coming just hours after Mr Trump’s latest comments on purchasing the territory.
With the Pituffik air base, Greenland is strategically important for the US military and its ballistic missile early-warning system.
Greenland defiant
The president-elect sparked anger on the territory when he wrote that American ownership and control of the island was an “absolute necessity” for “purposes of national security and freedom throughout the world”.
Its prime minister Mute Egede hit back, saying: “Greenland is ours. We are not for sale and will never be for sale. We must not lose our long struggle for freedom.”
And Danish defence minister Mr Poulsen said: “My response to Trump is the same as the prime minister’s. Greenland does not want to exchange the Commonwealth for other relations. But that is up to Greenland itself.”
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Greenland’s Prime Minister Mute Egede. File pic: Reuters
Mr Trump also proposed buying Greenland during his first term in office – an idea the Danish Prime Minister Mette Frederiksen called “absurd”.
Greenland has been part of Denmark for more than 600 years and gained autonomy from the country in 1979.
Under Greenland’s self-government act, enacted by Denmark and Greenland in 2009, Greenlanders are recognised as a people or nation entitled to the right of self-determination, with the option of independence.
On Monday, in an announcement naming Ken Howery as his ambassador to Denmark, Mr Trump wrote: “For purposes of national security and freedom throughout the World, the United States of America feels that the ownership and control of Greenland is an absolute necessity.”
He has also threatened to take back control of the Panama Canal, accusing Panama of charging excessive rates to use the waterway, which allows ships to cross between the Pacific and Atlantic oceans.
American Airlines was forced to ground all flights in the US on Christmas Eve due to an unspecified technical issue.
The airline did not immediately say why it was stopping all flights, but social media was quickly abuzz with travellers worrying about getting to their loved ones for the holiday.
A groundstop notice was lifted not long after it was issued, but the possibility of disruption remains with so many flights needing to make up time.
Earlier on Tuesday, the airline said on social media: “An estimated timeframe has not been provided, but they’re trying to fix it in the shortest possible time.”
The Federal Aviation Agency said American Airlines was reporting “a technical issue and has requested a nationwide ground stop”.
In an update on Tuesday afternoon it said: “American Airlines reported a technical issue this morning and requested a nationwide ground stop. The ground stop has now been lifted.”
The groundstop notice that was later rescinded
Passengers on social media reported having their flights stuck on the runway at various airports and being sent back to the gate.
American Airlines operates thousands of flights per day to more than 350 destinations in more than 60 countries.
It comes months after a faulty CrowdStrike software update led to worldwide flight cancellations.
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