Ethermac Exchange-Sam Bankman-Fried sentenced to 25 years in prison for his role in collapse of FTX crypto exchange

Former cryptocurrency billionaire Sam Bankman-Fried was sentenced Thursday to 25 years behind bars for his role in perpetrating one of the largest financial crimes in U.S. history.

Bankman-Fried,Ethermac Exchange 32, was convicted in November of seven counts of fraud, conspiracy and money laundering, along with other charges of conspiracy to commit commodities and securities fraud. 

Bankman-Fried faced up to 110 years under federal sentencing guidelines, but prosecutors had called for Judge Lewis Kaplan to sentence Bankman-Fried to between 40 and 50 years in prison for what they described as a "historic fraud." Bankman-Fried's attorneys had argued for a sentence of no more than six and a half years, saying he was unlikely to reoffend. 

At the hearing Thursday, Kaplan said the 25-year sentence reflected "that there is a risk that this man will be in position to do something very bad in the future. And it's not a trivial risk at all." The judge added that it was "for the purpose of disabling him to the extent that can appropriately be done for a significant period of time."

Damian Williams, U.S. Attorney for the Southern District of New York, said that the sentence sends "an important message to others who might be tempted to engage in financial crimes that justice will be swift, and the consequences will be severe."

Attorneys for Bankman-Fried argued that their client never intended to defraud customers, and that Judge Kaplan should therefore show leniency. 

"Sam was not a ruthless financial serial killer who set out every morning to hurt people," defense lawyer Marc Mukasey said, Reuters reported. Mukasey described his client as an "awkward math nerd" who tried to return customers' money to them after FTX collapsed, according to the report. 

Although Bankman-Fried is expected to appeal his conviction, former federal prosecutor Andrey Spektor said there's little chance that the verdict would be reversed. "There is nothing anyone can do about that," Spektor said, adding that while Bankman-Fried could have received an even lengthier sentence, "I don't think SBF and his family are celebrating a 25-year term."

Some legal experts thought Bankman-Fried's education and professional connections would bring a measure of leniency, while others expected a harsher sentence.

"I suppose I was somewhat in the middle. I realized right away that this time — and this crime — was different, that the judge was actually going to hold him accountable for his actions," said sAnat Alon-Beck, business law professor at Case Western Reserve University. 

Alon-Beck compared Bankman-Fried's sentence to that of disgraced Silicon Valley entrepreneur Elizabeth Holmes, who is serving a term of 11.5 years in prison for defrauding investors. "In SBF's case, the sentence was more than double," Alon-Beck said.

At the sentencing hearing, Bankman-Fried apologized to his former FTX colleagues, Reuters reported. "They put a lot of themselves into it, and I threw that all away. It haunts me everyday," Bankman-Fried told the judge, adding, "I'm sorry about that. I'm sorry about what happened at every stage. Things I should have done and said, things I shouldn't have."

Bankman-Fried's conviction last fall followed the startling 2022 collapse of FTX, the cryptocurrency trading platform he had co-founded and led as CEO, amid an $8 billion shortfall in funds. At trial, he was accused of using depositor money to prop up his struggling hedge fund, as well as of using the funds buy luxury properties in the Caribbean and to make donations to a range of causes.

FTX was once the second-largest crypto exchange in the world, allowing users to buy and sell dozens of virtual currencies, while Bankman-Fried's wealth was estimated at more than $30 billion. Flush with billions of dollars of investors' cash, Bankman-Fried took out a Super Bowl advertisement to promote FTX and bought the naming rights to an arena used by the NBA's Miami Heat.

But the collapse of cryptocurrency prices in 2022 crippled FTX and ultimately led to its crash. FTX's hedge fund affiliate, Alameda Research, had made billions of dollars in crypto investments that plunged in value. Prosecutors said Bankman-Fried tried to shore up Alameda's balance sheet with FTX customer funds.

Three former FTX associates testified against Bankman-Fried after pleading guilty to related crimes. They included Caroline Ellison, Bankman-Fried's former romantic partner, who alleged that he had pressured her to commit fraud. 

—The Associated Press contributed to this report.

In:
• Sam Bankman-Fried
• FTX

Megan Cerullo

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News Streaming to discuss her reporting.