Former crypto mogul Sam Bankman-Fried was sentenced to 25 years in prison on Thursday

Sam Bankman-Fried, the former crypto mogul seen not two years ago as a possible rising star of American politics, was sentenced to 25 years in prison on Thursday, Reuters reports.

UPDATE 18:19 Lewis Kaplan, the judge in the case, handed down the sentence after rejecting Bankman-Fried’s claims that she did not defraud FTX customers and accusing her of lying during her testimony.

Federal prosecutors who handled the case related to the collapse of FTX, the world’s second-largest crypto trading platform at the time of its November 2022 collapse, had asked the court to sentence him to 40 to 50 years in prison.

Lawyers for Bankman-Fried, 32, argued instead that he should be sentenced to no more than 5 years and 3 months in prison.

Bankman-Fried, the son of two Stanford Law School professors, quit his Wall Street job to found a cryptocurrency investment fund in 2017, a decision that would set off the chain of events that transformed him from a crypto idol and billionaire with connections in the Democratic Party to a convicted felon facing decades in prison.

Two years after founding the investment fund Alameda Research, Bankman-Fried also founded FTX in 2019, a platform that allows its users to sell and buy digital assets such as bitcoin.

Sam Bankman-Fried had become one of the richest men in America thanks to FTX

Against the backdrop of the spectacular rise in the price of cryptocurrencies during the COVID-19 pandemic, Forbes magazine estimated the entrepreneur’s fortune at $26 billion in October 2021. He was the 25th richest man in America before he turned 30.

Bankman-Fried has used his wealth to buy political influence, becoming one of the top donors to the Democratic Party ahead of the 2022 US midterm elections.

Known for his unkempt hair and a habit of wearing rumpled shorts, including when hosting dignitaries like Bill Clinton at FTX’s Bahamas headquarters, Bankman-Fried hired stars like NFL player Tom Brady and comedian Larry David to advertise his company.

And in a crypto space wracked by allegations of fraud and money laundering, Bankman-Fried has been one of the few voices publicly advocating the need for regulation.

But federal prosecutors say the image of responsibility he cultivated hid years of embezzlement from FTX clients. The sandcastle he built collapsed in 2022 when the price of cryptocurrencies crashed and he used FTX customers’ money to cover Alameda’s losses.

Bankman-Fried’s ex-girlfriend testified against him

In November 2023, one year after the collapse of FTX, a US jury found him guilty of all 7 counts brought by prosecutors against him. Jurors needed only 4 hours of deliberations to reach a verdict that concluded that Sam Bankman-Fried stole $8 billion from the money of users of his crypto platform.

Three former associates of his at FTX and Alameda Research, including his girlfriend, pleaded guilty and testified for the prosecution in an effort to obtain reduced sentences. Their testimonies illustrated a person who had problems with his temper and who played the part of the eccentric entrepreneur to the public.

“He understood the rules but decided they didn’t apply to him. He knew what society considers illegal and unethical, but he ignored these things based on a harmful megalomania that guided the defendant’s own values ​​and sense of superiority,” US prosecutors wrote in their indictment.

Bankman-Fried has pleaded not guilty and said she will appeal both the conviction and sentence. Speaking in the defendant’s box, he said he had made mistakes that damaged FTX, but that he did not intend to defraud anyone and steal customers’ money.

“We thought we might be able to build the best product on the market. It turned out to be just the opposite,” he said in his defense on October 27.