'Crypto King' Sam Bankman-Fried sentenced to 25 years in prison

We are shortly going to be bringing our live coverage to a close.

But, before we go, here are today's key moments:

• Sam Bankman-Fried has been jailed in the United States for 25 years for stealing $8bn from the customers of the now bankrupt FTX cryptocurrency exchange he founded
• At his sentence hearing in New York City Judge Lewis Kaplan said crypto's former golden boy had known he had acted criminally but had shown no remorse
• Bankman-Fried said he made mistakes, but did not admit criminal wrongdoing in one of the biggest financial frauds in US history
• It caps a meteoric rise and fall for the 32-year-old, who in less than three years built a multi-billion-dollar empire and lost it all
• Bankman-Fried is expected to appeal
• Attorney General Merrick Garland praised law authorities for their "outstanding work" in bringing Bankman-Fried to justice
• Speaking after the sentencing, Garland said "there are serious consequences for defrauding customers and investors"

ReutersCopyright: Reuters

FTX customers lost access to their money when the firm collapsed and many are losing hope of ever seeing it again.

Some have even opted to sell their claims.

That’s even though a lawyer working on the separate bankruptcy case said in January he was “cautiously" optimistic that customers owed money could "eventually be paid in full".

Many former customers are still unhappy. That’s because under the current plan, they would receive what their holdings were worth in dollars at the time FTX failed, missing out on the recovery that crypto assets like Bitcoin have seen since.

Some have even sued over the proposal. John Ray, the lawyer put in charge of FTX after its collapse, noted those concerns in his own letter to the court ahead of the sentencing, in which he said many people have suffered and will continue to.

He said claims to the contrary were a sign that Sam Bankman-Fried was still living a “life of delusion”.

Bitcoin fell in the immediate aftermath of the FTX collapse.

It had significantly sunk in value already - triggered by factors ranging from the cryptocurrency terraUSD collapsing, and the increased cost of energy, which is used to “mine” it.

At one point Bitcoin hit a low of $16,000 (£12,650) in November 2022 - but that price is unrecognisable from its current value of more than $70,000.

In fact, you might say that the FTX collapse actually caused Bitcoin to become more stable for a time - though that stability has been replaced by inconsistent jumps in value since October 2023.

But if you are tempted by the thought of crypto, just remember that Bitcoin was previously worth almost $70,000 in 2021 before losing 70% of its value.

And cryptocurrency still remains broadly unregulated both in the UK and US.

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Ahead of Sam Bankman-Fried's trial last year, the BBC spoke to a British man about how the failure of FTX lost him $2.1m (£1.7m).

Until the final collapse, Sunil Kavuri - who is in the New York court today for the sentencing - hoped that SBF could turn things around.

The "King of Crypto's" empire was faltering, but while others panicked, Kavuri remained calm - experience in trading for banks and investing his money in crypto made him hardened to market dramas.

Plus Bankman-Fried - the self-appointed saviour of crypto - kept telling the world that everything would be fine.

But then the message popped up on the screen - withdrawals suspended.

For Kavuri, years of savvy, stressful and successful trading were down the drain, and all of his invested money was gone.

Quote Message: I was on the computer for basically 24 hours refreshing the page and trying to email the FTX support desk to get my money out. I felt sick. I just thought, 'Oh my God, that's it. I've lost everything'."

I was on the computer for basically 24 hours refreshing the page and trying to email the FTX support desk to get my money out. I felt sick. I just thought, 'Oh my God, that's it. I've lost everything'."

Kavuri - who lives in the East Midlands in England - was saving the money for a new house and to put his son through university, but now, nearly a year later, all he has is the paper trail of what was once his.

He is thought to be the worst-hit British victim of the FTX collapse.

You can read more of his story here.

When FTX collapsed, some predicted it would have a catastrophic impact on cryptocurrency.

It’s easy to see why.

At one point, FTX held more than $10bn in deposits, which solidified concerns that leaving the industry unregulated had significant pitfalls.

But even so, both in the UK and US, crypto remains largely unregulated, despite repeated calls for it to happen.

The most significant change in the UK probably was the decision to make companies offer customers a 24-hour "cooling-off period".

But more significant moves - such as preventing so-called “pump and dump” where an individual artificially inflates the value of a crypto asset before selling it - are yet to materialise.

The collapse of FTX simply did not significantly change regulation or law.

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Reacting to the 25-year sentencing, Attorney General Merrick Garland says: “There are serious consequences for defrauding customers and investors.

“Anyone who believes they can hide their financial crimes behind wealth and power, or behind a shiny new thing they claim no one else is smart enough to understand, should think twice."

He adds that he's grateful to the US Attorney’s Office for the Southern District of New York and the FBI for their "outstanding work" in bringing Bankman-Fried to "justice".

As we've been covering the sentencing of Sam Bankman-Fried, we're now getting reaction from some of the people who were harmed in what's been called one of the biggest financial fraud cases in history.

Louis Dorigny, a victim of the FTX fraud based in California, says that learning of SBF's sentencing today arrives as a "bittersweet" moment.

Speaking to the BBC OS earlier, he acknowledges that 25 years is a long time to be in prison, but adds that it does nothing to compensate the victims for the loss.

Dorigny says he lost "hundreds of thousands" and while he realises that all investing comes with risks, his biggest hangup with the FTX founder lies in the fact that "he promised us a safe venue".

"And that’s where he failed us."

I've just spoken to Carl Tobias who is a law professor at the University of Richmond in Virginia - and he believes Sam Bankman-Fried's sentence is appropriate.

He tells me: "I think Judge Kaplan was very careful and comprehensive and used the 25-year prison sentence and the mandate that SBF return $11bn as a deterrent to him - but also to others who might be disposed of engaging in the same kind of fraudulent behaviour.

"Ultimately I think it will be sufficient to deter people."

I asked whether or not this case presents the need for tighter regulation in the crypto world.

"Regulation is very much on the minds of the Biden administration," he replies. "I think they are trying to move on a number of fronts and hopefully we will have support from congress.

"I think at some point we are going to see more regulation."

Here are some more sketches of SBF during the hearing, when he stood to make a statement to the judge.

As we reported earlier, he said he made "a series of bad decisions”, and admitted "there are a lot of mistakes that I made".

But he stopped short of giving a full apology.

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If you want to learn more about the rise and fall of Sam Bankman-Fried, and the future of cryptocurrency, check out the new episode of The Global Story podcast from the BBC World Service.

Presenter Katya Adler speaks to the BBC’s Cyber Correspondent Joe Tidy, who interviewed Bankman-Fried just days before his arrest, and the BBC’s North America Business Correspondent Erin Delmore, who covered the trial in New York and was in court again today for his sentencing.

• You can listen here

White collar crime expert, Western New England University School of Law Professor Jennifer Taub, says the length of the sentence is appropriate, pointing out that “white collar crime is not victimless”.

“It is the right balance between how old he is and what is the purpose of deterrence. He will be getting out in his fifties," she says.

Taub tells me Judge Lewis Kaplan "knows the type of sentences people normally get." She pointed out that convicted fraudster Elizabeth Holmes is set to serve just over 10 years for her role in wire fraud at the now defunct blood testing company Theranos.

The sums involved in that case, she noted were substantially less than the $8bn dollars lost at FTX.

Age was another factor.

"Someone in their fifties won’t be such a wunderkind", she adds, meaning the judge may have felt Sam Bankman-Fried could change and "might have lost the inclination to cheat people."

Artist Jane Rosenberg was in court today, watching as Sam Bankman-Fried was sentenced to 25 years in prison.

Rosenberg's sketches show what it was like in the courtroom, where media are not allowed cameras.

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REUTERS/Jane RosenbergCopyright: REUTERS/Jane Rosenberg

REUTERS/Jane RosenbergCopyright: REUTERS/Jane Rosenberg

Mitchell Epner, a former federal prosecutor who now focuses on white-collar crime at the law firm Rottenberg Lipman Rich, said he was "very surprised” Judge Kaplan only sentenced Sam Bankman-Fried to 25 years.

“Judge Kaplan ruled against Mr Bankman-Fried on virtually every factual issue, found that he committed three types of perjury and absolutely knew that he was doing 'wrong,'" he tells me.

"Nevertheless, Judge Kaplan held that 25 years was all that was 'necessary' to meet the aims of federal sentencing."

Pointing out differences in punishment for non-white collar crimes, Epner notes “people who traffic one kilogram of heroin (which sells wholesale for less than $30k) are sentenced to far longer sentences than Bankman-Fried, whom Judge Kaplan found was responsible for about $10bn in losses".

ReutersCopyright: Reuters

Damian Williams, US Attorney for the Southern District of New York, says Samuel Bankman-Fried "orchestrated one of the largest financial frauds in history".

He goes onto say Bankman-Fried's "deliberate and ongoing lies demonstrated a brazen disregard for customers' expectations and disrespect for the rule of law".

"The scale of his crimes is measured not just by the amount of money that was stolen, but by the extraordinary harm caused to victims - who in some cases had their life savings wiped out overnight," Williams adds.

Finally, he says the sentence will prevent Bankman-Fried from ever again committing fraud.

Samuel Hapak’s firm represented 200 investors who lost a total of $35m after FTX filed for bankruptcy protection.

The CEO of trading software developer Wincent and has just spoken to World Business Report on the BBC World Service, and he says Sam Bankman-Fried’s 25-year sentence is "fair".

"Twenty-five years is a lot and I believe that this sounds like a reasonable signal to the industry that it needs to step up the game," he says.

Hapak adds that his clients were "upset, they were angry" after FTX imploded.

"They considered us utterly incompetent - that we were able to trust such a fraudster, that we didn’t see this coming sooner,” he says.

Wincent ended up losing half of its capital - about $70m - and 25% of its investors, Hapak tells the BBC.

“They decided they didn’t trust us anymore, they didn’t trust our judgement anymore. They took away the remaining money that they had with us."

Sam Bankman-Fried was quickly led out of the courtroom, and it appeared from our view that he did not have an opportunity to interact with his parents.

Barbara Fried and Joseph Bankman lingered in the courtroom in an effort to escape the crush of press. The parents of the FTX founder have attended nearly every minute of the trial, maintaining a stoic appearance to the end.