back to article FTX crypto-crook Sam Bankman-Fried gets 25 years in prison

Fallen crypto-king Sam Bankman-Fried has been jailed for 25 years after New York federal judge Lewis Kaplan expressed disbelief at almost every argument from his legal team. The mastermind behind one of the largest cases of corporate fraud in US history was convicted on seven charges (conspiracy to commit wire fraud on …

Page:

  1. TVU Silver badge

    Under the circumstances, he has just got very lucky. After all, this is the land of 99+ year sentences.

    1. Anonymous Coward
      Anonymous Coward

      If they'd sentenced him to the chair, it'd have been...

      "Bank man Bankman-Fried fried".

    2. Anonymous Coward
      Anonymous Coward

      Mommy & Daddy

      His parents should be locked up as well.

  2. Howard Sway Silver badge

    That's 1 day for every $876712 he looted.

    I mean, I'd happily do a week inside if it meant I could have over $6 million to burn through............

    1. GBE

      I'd happily do a week inside if it meant I could have over $6 million to burn through

      When sent to prison for fraud/theft you don't get to keep what you stole. His sentence also includes the requirement to forfeit more than $11 billion.

      You'd spend the rest of your life trying to repay that $6 million.

      1. Lon24

        By the time he gets out $11 billion will buy you the New York Times (paper/subscription - not the company) and he will have had 25 years to cooks up an even cleverer scam. All he needs is a new girlfriend ...

      2. spuck

        You'd spend the rest of your life trying to repay that $6 million.

        I'll give it my best shot, at $200/month for the rest of my life.

      3. Jon 37

        He's already had several years of living the high life, spending lots of fraudulently acquired money on houses and parties and other luxuries. That part of the money is gone. Though there is plenty of other money and assets for the government to seize.

    2. Snake Silver badge

      This morning's local news

      On the radio they mentioned that SBF was going to add to his plea for a shorter sentence was the 'fact' that, thanks to Bitcoin's recent surge, 'people were making their money back and therefore losses were minimized'.

      Nice of him, don't you think?

      1. Just Enough

        Re: This morning's local news

        Crypto-currency disciples can't stop hyping their scam, even when prison time is staring them in the face. It's so deeply engrained in their psyche that hype is how it functions, this is what you do, that they can't see that it is not how real investments and real currencies work. The ponzi scheme at the root of it totally eludes them.

        1. Eclectic Man Silver badge

          Re: This morning's local news

          Just wondering, whatever happened to the next 'big thing', Non-Fungible Tokens?

          They were all the rage a while ago, but I have not seen anyone trying to hawk them at all recently. Have they lost their lustre?

          1. Anonymous Coward
            Anonymous Coward

            Re: This morning's local news

            > whatever happened to the next 'big thing', Non-Fungible Tokens? ... Have they lost their lustre?

            They have been buried in with the rest of the garden waste and are composting away.

            What was non-fungible are fungus now.

          2. Dinanziame Silver badge
            Angel

            Re: This morning's local news

            There are still people trying to sell them! I recently saw a hotel showing NFTs on a wall, and apparently all you had to do to buy them was scan a QR code.

            I know a guy who claims he made money on every NFT he's bought and sold. He carefully neglects to mention that there's some he's bought, but never sold...

          3. MichaelGordon

            Re: This morning's local news

            I could never figure out what the point of an NFT was - i.e. what could I, as the owner of an NFT for, say, an image, do with that image that someone who didn't own the NFT couldn't do.

            1. Eclectic Man Silver badge

              Re: This morning's local news

              I concluded they were a vaguely legal 'scam' in that you seemed to 'own' something, but that it had no actual physical form or value. I did not buy any, and have not regretted that. Certainly not in the same way I regret not buying bitcoins when they were less than US$100 each ...

      2. Dave Pickles

        Re: This morning's local news

        Nice comment by the Judge (reported by BBC News):

        "A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back what he stole."

        1. Anonymous Coward
          Anonymous Coward

          Re: This morning's local news

          If he been able to postpone his court case maybe we'd see; "A politician who takes his loot to Florida and successfully bets the stolen money is entitled to a full discount on every sentence by using his New York City winnings to pay back what he recorded" after Tuesday, November 5, 2024 in the USA.

      3. Ian Johnston Silver badge

        Re: This morning's local news

        It would have been a better argument - though still not a good one - if he hadn't stolen all their Bitcoins.

      4. Benegesserict Cumbersomberbatch Silver badge

        Re: This morning's local news

        Hang on, what about the Bitcoin Bros' dogma that fiat currencies are the scam, and that BTC is a store of value? On that basis, his USD liabilities for his frauds are much higher now than they were when he committed them.

  3. rgjnk
    Flame

    Should've been longer

    As the judge noticed, he has zero remorse, he'd do it all again, and indeed his habits with dodgy activities never stopped.

    25 years is hardly light, but this sort of thing needs a proper slap beyond what you could get for much smaller crimes.

    1. Anonymous Coward
      Anonymous Coward

      Re: Should've been longer

      As the judge noted, he engaged in witness tampering while out on bail.

    2. Thought About IT

      Re: Should've been longer

      With those characteristics and behaviour, he'd have a good chance of running for president!

  4. amanfromMars 1 Silver badge

    Is that the end of it all?

    Are his parents to be prosecuted for aiding and abetting his shenanigans? By all accounts have they not a lifetime of experience and no little professional knowledge of what one should definitely not be doing in such business as SBF thought he was god’s gift and aceing it?

    1. Ken Hagan Gold badge

      Re: Is that the end of it all?

      I don't think they can be held liable for the actions of another adult. Their background does, however, completely nail any idea that their son couldn't be expected to understand the consequences of his actions. He appears to have taken several billion dollars of other people's money and just spent it on himself and his friends with no realistic prospect of ever being able to pay it back. The rest of us need to be protected from people like that.

      1. Anonymous Coward
        Anonymous Coward

        Re: Is that the end of it all?

        They also were enriched with money they had to know was stolen.

        1. amanfromMars 1 Silver badge

          Re: Is that the end of it all? @Anonymous Coward

          Does that render them as willing accessories before, during and after the fact, AC, and thus complicit co-conspirators??

          1. MachDiamond Silver badge

            Re: Is that the end of it all? @Anonymous Coward

            "Does that render them as willing accessories before, during and after the fact, AC, and thus complicit co-conspirators??"

            It would be difficult to prove his parents as co-conspirators unless there's some very damning evidence. The parents don't seem all that bright (also never married due to some strange reasons) so it may be that they never suspected their clever little boy was ripping people off rather than being a first-in genius when it came to crypto.

        2. DS999 Silver badge

          Re: Is that the end of it all?

          How did they "have to know" it was stolen? Parents are usually the last to believe their child is doing anything illegal. How often have we seen the parents of a murderer trying to make excuses for them claiming it was others who were truly responsible to saying "I believe in my heart he's not guilty"

          1. John Brown (no body) Silver badge

            Re: Is that the end of it all?

            True. Also, his parents are basically saying that now and will continue to campaign and appeal.

          2. Michael Wojcik Silver badge

            Re: Is that the end of it all?

            In the context of SBF's trial, of course his parents are not defendants, and what they knew is irrelevant.

            Now we have a civil case pending against them, and it may well be that criminal charges follow, since evidence is being presented that they were materially involved in FTX and Alameda and knew of wrongdoing.

            As you say, whether they knew the money was stolen needs to be proven in court, not just assumed. And bad-parenting laws are often problematic (aside from the criminalization of abuse, of course), as in the Crumbley case, since they do not have a scientific foundation and are effectively guilt by association. Let's see Bankman and Fried tried for things they did, not what their son did.

      2. MOH

        Re: Is that the end of it all?

        Or friends like that

    2. Dickie Mosfet

      Re: Is that the end of it all?

      "(Joseph) Bankman, according to FTX, was right in the thick of a whole bunch of FTX business—what sounds like just about everything that did not involve the actual trading of crypto and minting of coins. The suit says that SBF’s father directed where company payments would go, picked out charities to benefit from his son’s largesse, entered into and terminated contracts, hand-picked the company’s outside counsel, made hiring recommendations, and authorized expenses. The suit also says that some of FTX’s expenses wound up paying for really nice things for him and Fried."

      "FTX’s new management says that Fried, SBF’s mother, used ill-gotten funds from her son’s businesses as a piggy bank for her political action committee. The PAC, an operation called Mind the Gap that tries to get Democrats elected to office, and its supported causes received “tens of millions” of dollars from Bankman-Fried and FTX executive Nishad Singh, the complaint says. (According to the Federal Election Commission, Singh’s portion amounted to $1 million.) Singh’s contributions, it notes, came directly out of FTX’s coffers. It details a money-in, money-out cadence in which Bankman-Fried’s hedge fund sent money to Singh and then, within a day, Singh sent similar (or even identical) amounts directly to Bankman-Fried’s mom’s PAC. Singh has admitted to campaign finance violations. Maybe Fried, SBF’s mother, was entirely unaware of and disconnected from this operation. But an August 2022 email cited in the lawsuit includes Fried explicitly explaining to her son that he could use another FTX executive to make PAC contributions in his name, “but that has its own costs and risks.” Not a great thing to have in writing!"

      "Other parts of the lawsuit sit somewhere between outrageous and very funny. The suit says that Bankman, SBF’s father, was at one point drawing a $200,000 annual salary from FTX but that he thought he was “supposed to” be getting a nice, round $1 million. He emailed his son, according to the suit, “Gee, Sam I don’t know what to say here. This is the first [I] have heard of the 200K a year salary! Putting Barbara on this,” he added, calling in the boss’s mother. The suit says that shortly thereafter, Bankman-Fried made a $10 million gift to his parents out of funds from Alameda Research (FTX’s sister hedge fund), then had the couple put on the deed to a $16.4 million Bahamas property with funds “ultimately provided” by FTX."

      Source: The Parent Flap: Sam Bankman-Fried’s folks were allegedly tied up in his crypto empire—including some of its shenanigans.

      1. JoeCool Bronze badge

        Re: Is that the end of it all?

        A statement from the new management is hardly credible without actual proof of their claims. Note that there is no direct evidence the the parents knew the funds were *embezelled*

        If those docs existed, the prosecutors would have them along with new charges to file.

        1. Dickie Mosfet

          Re: Is that the end of it all?

          It's not just a statement from FTX's new management—it's a lawsuit.

          BBC: FTX: 'King of Crypto' parents sued over missing millions

          SBF's parents will be deposed by FTX's lawyers before the court case, at which point we'll find out exactly what they knew. I'd love to be a fly on the wall for that one.

      2. Michael Wojcik Silver badge

        Re: Is that the end of it all?

        To be fair, I'm a bit disappointed my kid hasn't just handed me a million dollars. I mean, who wouldn't be?

        1. Dave314159ggggdffsdds Silver badge

          Re: Is that the end of it all?

          It seems a tad unreasonable of me to be disappointed *your* kid hasn't just handed me a million dollars. But disappointed, I still am.

  5. martinusher Silver badge

    So he sold shady investments to willing suckers

    Apart from the 'crypto' thing there's nothing new here, its just a classic case of confusing cash flow with income. The suckers come from the need to get in quick to make a killing, the stereotypical con artist victim.

    Obviously there's a line between a 'legal' con and an 'illegal' con. I wonder if its just in the small print of the prospectus?

    1. JoeCool Bronze badge
      FAIL

      that is a 100% wrong summary

      there are lots of words written on wny this as financial theft, not a con.

    2. This post has been deleted by its author

    3. Derezed

      Re: So he sold shady investments to willing suckers

      You should read more, he didn’t just con people he committed a massive fraud…no blurred lines.

    4. Jon 37

      Re: So he sold shady investments to willing suckers

      FTX itself was an exchange. The way it is supposed to be is: You give them money, they hold that money on your behalf. You tell them "buy Bitcoin", they now hold less dollars on your behalf, and they buy Bitcoin to hold on your behalf. You tell them "I want my stuff", they give you your dollars and Bitcoin back. And at every step, they charge a small fee (or give you a slightly worse exchange rate) to make money from you.

      FTX itself was not supposed to be an investment at all. They claimed to be just holding your stuff on your behalf. They were middlemen. The Bitcoin or other coin was the investment.

      Brokers and exchanges exist for stocks and shares, too, and are highly regulated.

      But FTX didn't worry about holding money and Bitcoin on your behalf. They just took your money and either invested it badly and lost it, or just spent it. And they lied to everyone by saying that they had your money and coins. They actually only had enough to cover withdrawals. Until there were more withdrawals than deposits, and they ran out of money.

      1. Dave314159ggggdffsdds Silver badge

        Re: So he sold shady investments to willing suckers

        I'm not sure I understand quite what went on that was so wrong. Didn't SBF say he'd hold the funds in a mix of cash and crypto-coins, and then 'sell' billions of dollars of his own crypto-coins to the exchange in return for the real money? So what's the difference between that and holding bitcoins or any of the other not-money?

        Seems like the only complaint is that he didn't establish an arms-length price for them.

        IDK, it just doesn't seem any more 'fraud' than anything else involving crypto not-money. The fools give their money to people who obviously aren't ever going to give it back, don't read the t's & c's that say it's a black hole, and then complain about what they freely signed up to out of sheer greed. You don't have to commit fraud to take money from mugs like that.

        1. doublelayer Silver badge

          Re: So he sold shady investments to willing suckers

          It is quite simple. If I open an exchange where you can buy things, you are still in control. You give me your money, and you decide what to buy. If you choose to buy 2 bitcoin at the price I offer them, then you now own 2 bitcoin and whatever money is left after you purchased them. I don't get to decide that I'm going to sell you a different cryptocurrency instead, because I'm running an exchange. My job is to buy the stuff you said to buy. If you lose money because you bought something that went down in value, that's on you. If I choose to ignore what you said and spend on something else, it's on me and it is a crime.

          Your description of what happened is just wrong.

          "Didn't SBF say he'd hold the funds in a mix of cash and crypto-coins, and then 'sell' billions of dollars of his own crypto-coins to the exchange in return for the real money?"

          Neither. He said he would hold exactly what the customers asked him to hold, whether that's just cash, just cryptocoins, or a combination, and they get to choose the proportions and which specific cryptocoins those were. As for the coin he invented, FTT, he didn't sell those to FTX, they were already the property of FTX, and they were supposed to be just one choice of things you could buy. Of course, he used that as a method to slightly hide the fraud on the balance sheet, not that it took people very long to notice even with that fiction.

  6. Boris the Cockroach Silver badge
    Holmes

    Theres a shock

    Steal little people's money by .. say using an estimate of their power usage then jacking up their direct debits to take the maximum you can rather than what they've actually used... the courts/cops go 'meh' and leave you to struggle to get your money back.

    Invest 10 million of your money in a crypto ponzi scheme thats run by a company thats 6 months old thats sure to pay you back 25% per year or more untaxed and the cops/courts throw the crook in the slammer...

    1. heyrick Silver badge

      Re: Theres a shock

      That's why I pay my bills by debit card and flatly refuse to use direct debit. In a world where smart meters send back our consumption every single day, taking any amount more than that really ought to be classified as corporate theft and punished with heavy fines. But, no, they know our exact consumption yet still take entirely fictitious amounts.

      1. Catkin Silver badge

        Re: Theres a shock

        There's definitely abuse that should be rightly cracked down upon but the concept of paying an even amount throughout the year rather than having a bill shock in the colder months makes sense to me. For the financially secure/savvy, there's more money to be made by holding the excess cash through the summer and wisely investing it but if you're not very good with money and have limited income, it can get a lot more expensive to be caught out.

        The problem is that it's decided by the same people who stand to profit from overpayment. It would be better if the data were readily available cross-platform (with the consent of the consumer) so people could run their own analysis. I personally do it manually anyway but lowering the barrier to entry seems beneficial if it gets more people in charge of their own finances.

        1. Doctor Syntax Silver badge

          Re: Theres a shock

          "there's more money to be made by holding the excess cash through the summer and wisely investing it"

          That's probably SBF's thinking but he was a bit unlucky. He probably genuinely, really expected to be able to get it back, plus what he spent on himself, friends and family, before anyone noticed; the self-delusion of everyone who gambles with other people's money and loses.

        2. Benegesserict Cumbersomberbatch Silver badge

          Re: Theres a shock

          I thought that too, when I received a bill for about a year's worth of gas supply in summer, when I basically don't use gas.

          I had already done my own meter-read and got a refund from the utility company by the time I realised my mistake: the first 100MJ (or something) of gas are the most expensive, then an intermediate tariff for 100-500MJ, then the cheapest rate was for usage 500MJ+ per billing period. So by paying for gas I hadn't used yet, I was buying the most expensive gas in advance at the cheapest rate.

          The winning strategy therefore becomes: pay what looks like an exorbitant bill for gas I haven't used yet in summer, then get a negative bill the next billing period and use the credit on the account to pay for the gas in the winter when it's expensive and I actually use it.

          This strategy becomes possible because I realised the gas company can't be arsed to do an actual meter-read more than one or twice a year, and because of the time of year that they do the actual meter-read, their extrapolated estimate of my consumption is based on winter usage, not average usage, let alone summer (non-)usage.

          Oh, and I'll heat my house with solar powered reverse cycle AC which is free, even in winter.

    2. Dave314159ggggdffsdds Silver badge

      Re: Theres a shock

      What are you babbling about? You can choose whether or not to give a utility company money ahead of time so you don't face a bigger bill later in the year, or not. If they have more of your money than you'd like, and they don't return it on request - which, in fact, they normally do - then you sue them, and get the money; it's a formality.

  7. aerogems Silver badge
    Boffin

    I mean, on the one hand, at least the people who were caught up in this will have some measure of justice done. I'm sure many would want a longer or harsher sentence, but that's how revenge works, not justice.

    On the other hand... what this guy did is fundamentally the same as what banks did leading up to the 2008 banking crisis. After years of US politicians chipping away at the firewalls erected after the 1920s financial meltdown, allowing banks to mix customer funds put into checking and savings accounts, with funds put into investment accounts, shit predictably hit the fan again -- worst part is, after putting back significantly watered down firewalls shortly after, within a couple years there were efforts to knock them down again. People lost huge amounts of money, but the banks were bailed out and no one (that I'm aware of) faced any kind of prison time as a result of their actions. So, it kind of seems like this guy is being treated disparately harsher than all the CEOs of major banks who were pulling the same kind of shit. Not saying this guy doesn't deserve some time in prison, but there should be enough people to have a whole prison wing devoted to people who committed this kind of fraud on people, not just him, Madoff, and maybe a couple other small-timers.

Page:

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like