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U.S. District Judge Lewis Kaplan sentenced the co-founder and former CEO of FTX to 25 years in prison, with three years of supervised release and the forfeiture of more than $11 billion in ill-gotten gains. Sam Bankman-Fried’s lawyers said they intend to appeal.
The hearing where Kaplan pronounced his sentence, though, was not a 15-minute formality. Arguably, it started the evening prior, when Richard Partington III, a 42-year-old part-time teacher in Long Island, became the first member of the public to line up in the dark to watch the result of the government’s successful prosecution of Bankman-Fried.
Add in crypto influencer Ben “BitBoy” Armstrong, a victim statement that went off the rails, a quietly defiant Bankman-Fried, and Kaplan’s measured condemnation of the former FTX CEO, and Thursday’s hearing was a fitting end to a trial that already had its fair share of bombshell reveals.
Outside the courthouse
Part of the minority of non-journalists to line up to snag a spot in the main courtroom, Partington III began camping out underneath the New York courthouse awning at 8:30 p.m.
“People like this you hear so much about,” he told Decrypt in an interview, in reference to Bankman-Fried, “and it's hard to know with the news whether things are true or not true.” This is why he came out to the trial in November, he said, and why he decided to go to the sentencing.
He wasn’t the only member of the public to line up in the rain. A mother, father, and their 15-year-old son traveled down from outside Boston. Bankman-Fried’s sentencing was a “good education opportunity” for their teenager, the mother, Ann Guo, 48, said. There were also law students, a documentary filmmaker, a crypto investor, and of course, a gaggle of journalists.
Even Ben “BitBoy” Armstrong, the crypto influencer embroiled in ongoing legal disputes, flew up from Atlanta, Georgia, to visit yet another courthouse. “We don't want to see these exchanges,” he said about FTX. “We don't want to see the bending of the rules from traditional finance coming to crypto.”
‘That was, in part, my doing’
In the mid-morning, Bankman-Fried’s hearing began. His parents, Joseph Allan Bankman and Barbara Fried, sat in the front of the courtroom and watched their son enter, his shackles clinking in the silence.
Judge Kaplan began by issuing legal rulings, and then Sunil Kavuri, an FTX victim from the U.K., addressed the court. “I lived the FTX nightmare for two years,” he said, detailing how the crypto exchange’s collapse cost him savings set aside for a future home and his children’s education.
However, his victim statement went off the rails after he focused solely on the FTX bankruptcy proceedings and the estate’s decision to return funds to customers in the dollar amount their digital assets were worth when the exchange collapsed—not their current value. “I think it would be helpful to bring your statement to a close,” said Kaplan, eventually losing patience.
After Bankman-Fried’s lawyer advocated for a lesser sentence to the judge—he said his client was “a beautiful puzzle”—the former crypto wunderkind addressed the judge himself.
“At the end of the day, I failed everyone,” said Bankman-Fried, wearing a baggy, prison-issued shirt. He continued, but he repeatedly qualified his responsibility. He said FTX victims should have been paid back in full, but they never were: “That was, in part, my doing.”
And he tacitly defended the text message he sent to Ryne Miller, the former general counsel at FTX and witness for the prosecution, in which he said he would “really love to reconnect and see if there’s a way for us to have a constructive relationship.”
He ended his address to Kaplan saying, “at the end of the day, there’s a silver lining” that FTX victims may be made full. (In a letter to the judge, John Jay Ray III, the current CEO of the FTX estate, said full repayment is not a foregone conclusion.)
Judge’s rebuke
Near the end of the hearing, Kaplan addressed Bankman-Fried and said that the former CEO “never had a word of remorse for the commitment of his crimes.”
Repeatedly referring to the testimony of Caroline Ellison, former CEO of the crypto hedge fund Alameda Trading (FTX’s sister company) and Bankman-Fried’s former romantic partner, Kaplan said that, instead of regretting his crimes, the former CEO has shown that he “regrets that he made a very bad bet about getting caught.”
Kaplan added that he documented at least three instances when Bankman-Fried perjured himself during his trial. “I’ve never seen a performance quite like that,” he said of the FTX co-founder’s time on the witness stand.
He read out the sentence. Bankman-Fried’s father cradled his head in between his legs, and his mother cast her eyes downwards. The courtroom cleared out before noon.
Edited by Andrew Hayward