Ex crypto tycoon Sam-Bankman Fried has been given a prison sentence of 25 years in the United States Federal prison. He has been accused of embezzling $8 billion from clients of the FTX cryptocurrency exchange he established, which is now insolvent. At a Manhattan court hearing on Thursday, US District Judge Lewis Kaplan issued the verdict after dismissing Bankman-Fried’s claim that FTX customers didn’t suffer financial losses and accusing him of providing false testimony during the trial. 

Bankman-Fried, 32, was found guilty by a jury on the 2nd of November on seven fraud and conspiracy counts which Arose from FTX’s collapse in 2022, which prosecutors have labeled to be one of the most significant financial frauds in US history. 

FTX used to be among the world’s biggest crypto exchanges before its demise, also turning Bankman-Fried as a business celebrity along the way and attracting millions of customers who came to the platform to buy and sell different cryptocurrencies. In 2022, rumors of financial instability triggered a surge in deposit withdrawals, leading to the collapse of the firm and revealing Bankman-Fried’s wrongdoing. 

Bankman-Fried was convicted by a New York jury on different charges which included conspiracy to commit money laundering and wire fraud, which followed a trial which elaborated how he had taken more than $8 Billion from customers, and then used that money to buy properties, make different political donations as well as use it towards other investments. 

Prior to announcing the sentence on Thursday, Judge Lewis Kaplan delivered a scathing evaluation of Bankman-Fried’s actions, saying he had lied during his testimony at trial when he claimed that he was unaware up until the last minute that his company was taking the funds that were entrusted to them by the customers for safe-keeping and other purposes. Although a 25-year sentence is significant, it still falls very short of the potential 100+ years sentence he could’ve gotten under official government guidelines.  

The judge was told by the Federal Prosecutors this month that such a long sentence was not necessary. However, they urged for a minimum of 40 years, arguing that Bankman-Fried had committed a massive fraud exhibited blatant disregard for the law. Bankman-Fried’s legal team advocated for a reduced sentence of approximately 5 to 6.5 years. His team argued that he was a non-violent, first-time offender while also pointing to mental health struggles and also arguing that the customers that were poised to recovering significant sums of the lost money under a plan devised through bankruptcy court. 

Mitchell Epner, a former federal prosecutor now practicing law at Rottenberg Lipman Rich, expressed astonishment at the verdict, pointing out that Bankman-Fried could potentially be released from prison in approximately 13 years. 

In his sentencing remarks, Judge Kaplan pointed out that what could amount to a life sentence is mostly unnecessary but Bankman-Fried still needs to get a punishment long enough so that it prevents him from committing more crimes in the future. “There is 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, not a trivial risk at all,” he said. Bankman-Fried was also ordered by him to forfeit $11 billion that can be used to compensate the victims.