Fallen crypto mogul and Bay Area native Sam Bankman-Fried was sentenced Thursday morning to 25 years in federal prison and ordered to forfeit $11 billion.
As the Associated Press reports, the 32-year-old Bankman-Fried was sentenced in the same Manhattan courtroom where he received his conviction last fall, by US District Judge Lewis A. Kaplan. And Kaplan mostly ignored calls for leniency from the defense, saying, "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."
Kaplan added that the 25-year sentence was "for the purpose of disabling him to the extent that can appropriately be done for a significant period of time."
Bankman-Fried was found guilty in November of seven counts of fraud in connection with his running of cryptocurrency derivatives exchange FTX. After spending money on a Super Bowl ad earlier that year, FTX declared bankruptcy in late 2022, and it was later discovered that depositors' money from FTX was being illegally used for investments by FTX's hedge fund affiliate Alameda Research, which itself had made crypto investments that lost billions in value.
Bankman-Fried testified that he was not aware of customers' funds being diverted to Alameda Research until just a couple of weeks before FTX collapsed. But Judge Kaplan cited this as one of several examples where he believed Bankman-Fried had perjured himself, as the AP reports.
Some investors and FTX customers may get their money back through Bankman-Fried's forfeiture of cash and property, though it's unclear how much. According to the court, FTX depositors lost around $8 billion, investors lost $1.7 billion, and lenders lost around $1.3 billion.
Judge Kaplan did take pity on Bankman-Fried in one regard: Due to Bankman-Fried's autism, Kaplan said, he was likely to be vulnerable to other inmates in a high-security prison, so he was ordered to serve his time in a medium-security prison near the San Francisco Bay Area, where his family lives.
In court on Thursday, per the AP, Bankman-Fried was given a chance to speak, and said, "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 also said, "My useful life is probably over. It’s been over for a while now, from before my arrest."
During his time in the spotlight as a crypto wunderkind, Bankman-Fried promoted the concept of "effective altruism" — a sort of pragmatic approach to philanthropy that has drawn in multiple Silicon Valley billionaires, but according to some it's also "morphed into a cult obsessed with the coming AI doomsday," per Politico.
Indeed, Bankman-Fried himself had become obsessed with the AI apocalypse, and had reportedly talked about purchasing the remote island of Nauru in Micronesia in order to build a doomsday bunker "to ensure that effective altruists survive" such an event. This was just one of the tidbits found in a memo to FTX executives that became part of the court record.
Bankman-Fried, via Alameda Research, was also an early investor San Francisco-based AI startup Anthropic, investing $500 million in the company which was founded in 2021 by former members of OpenAI who left that venture over disagreements about the future of AI — and its doomsday possibilities.
Top image: Former FTX CEO Sam Bankman-Fried arrives for a bail hearing at Manhattan Federal Court on August 11, 2023 in New York City. Federal prosecutors are asking U.S. District Court Judge Lewis Kaplan to revoke Bankman-Fried's bail and to be jailed until his October criminal trial. Bankman-Fried who has pleaded not guilty to multiple conspiracy and fraud charges was accused of witness tampering after the New York Times published a story featuring personal documents of Caroline Ellison, former Alameda Research CEO. Judge Kaplan will also hear arguments on the gag order placed on Bankman-Fried that was placed as part of his bail agreement for the alleged witness tampering. (Photo by Michael M. Santiago/Getty Images)
