Sam Bankman-Fried, founder of cryptocurrency platform FTX, was sentenced to 25 years in prison

A US court found Sam Bankman-Fried, founder of FTX, guilty of fraud and sentenced him to 25 years in prison. The sentence, handed down this Thursday, March 28, is a new chapter in the story of the fall of one of the most promising personalities in the emerging cryptoactive industry, whose fortune was worth 26.5 billion dollars (around 18, 9 billion euros at the current exchange rate) according to Forbes. And featured prominently on the covers of magazines like Fortune months before everything disappeared in a flash. A successful trajectory was abruptly interrupted by a financial scandal, one of the biggest in the USA, which harmed thousands of investors – including Portuguese – still with no prospect of recovering their money.

After, in November, the jury in the case decided on Bankman-Fried’s guilt, the final sentence arrived. The court found the former crypto tycoon guilty of seven crimes of fraud and criminal association and accused SBF, the initials by which he is known, of lying to the United States courts when he denied knowing, in court, that Alameda Research, the personal fund of the co-founder, used funds from FTX clients, according to Reuters.

According to court accounts cited by the agency, SBF stole a total of 8 billion dollars (7.4 billion euros) from customers who bought and sold crypto assets on the FTX platform by “lending” these funds to Alameda. Investors in the company FTX itself saw 1.7 billion dollars (1.6 billion euros) disappear. And whoever lent money to Alameda – the fund that SBF used to mask the illegitimate use of clients’ money – lost 1.3 billion dollars (1.2 billion euros).

SBF will appeal the sentence. His lawyer, Marc Mucasey, argued in court that there was no malice in his client’s actions: he “doesn’t make decisions with malice in his heart, he makes decisions with mathematics in his head”.

The judge in the case, Lewis Kaplan, disagrees and made particularly harsh comments before sentencing that SBF must spend a quarter of a century in prison. “He knew it was wrong. He knew it was a crime. He regrets making a bad bet regarding the possibility of being caught. But he won’t admit anything, as is his right,” said Kaplan, quoted by Reuters.

“The defendant’s assertion that FTX’s customers and creditors will be fully reimbursed is misleading, has logical defects, and is speculative. A thief who takes the loot to Las Vegas and makes successful bets with the stolen money is not entitled to a ‘discount’ on his sentence if he uses the money he won in Las Vegas to repay what he stole,” the judge quipped.

FTX went bankrupt in November 2022 in just a few days, in a turbulent week that highlighted the platform’s solvency problems and the little-scrutinized links between the company and the Alameda fund.

The insolvency administrator would later call the collapse of FTX one of the most shocking cases of his career – and he had been involved in the liquidation of energy company Enron, an emblematic example of massive fraud. “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial information as this,” said John J. Ray III at the time.

SBF would be arrested in December 2022 in the Bahamas, where he lived and where FTX was headquartered, and deported to the USA. The trial began in October 2023.

Now 32 years old, the young ex-millionaire apologized in court: “Clients have suffered because of this (…) I didn’t want to minimize that at all. I also think that is something that has been absent from my speech throughout this process, and I apologize.” To his former colleagues (three of whom testified against him, including the FTX administrator and ex-girlfriend Caroline Ellison), he expressed gratitude for their “effort” and regretted “throwing it all away”. “This torments me every day”, he acknowledged, quoted by Reuters.