Sam Bankman-Fried sentenced to 25 years in prison for FTX fraud

FTX founder and former CEO Sam Bankman-Fried was sentenced to 25 years in prison on Thursday. He faced up 110 years, with prosecutors wanting him to serve 40 to 50 years. Bankman-Fried's lawyers requested no more than six and a half years.

Bankman-Fried was convicted in November of seven counts of fraud and conspiracy after being accused of using FTX customer funds to cover losses at his hedge fund.

Yahoo Finance's Jennifer Schonberger reports the breaking details.

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Editor's note: This article was written by Stephanie Mikulich.

Video Transcript

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BRAD SMITH: We've got some breaking news. FTX founder, Sam Bankman-Fried sentenced today. Yahoo Finance's Jennifer Schonberger standing by with the details. Hey, Jennifer.

JENNIFER SCHONBERGER: Brad, Sam Bankman-Fried a former CEO of failed crypto exchange, FTX, reportedly sentenced to 25 years in prison by a Manhattan federal judge after a jury found him guilty on seven charges last fall for money laundering to securities fraud. Manhattan federal Judge Kaplan who presided over that trial last fall pointed to testimony from Bankman-Fried's former colleague Caroline Ellison saying that he knew what he did was wrong and that he knew that Alameda was spending customer funds on risky investments.

Kaplan saying that Sam Bankman-Fried perjured his testimony during trial. Kaplan saying, quote, "people need to feel. It's fair, or we're back to trial by combat or something like it. So punishment must fit the seriousness of the crime, and this was a serious crime." Now the 32-year-old had faced up to 110 years in prison. Prosecutors had asked for 40 to 50 years, while Bankman-Fried's lawyers had asked for 6 and 1/2 years. SBF apologized this morning in court, reportedly saying I'm sorry about what happened at every stage.

This ends the saga of what federal prosecutors have called one of the greatest financial crimes in US history. Once the darling of crypto, Bankman-Fried hobnobbing with celebrities like Gisele Bundchen and Tom Brady to politicians now used billions of dollars from FTX customers to fund his personal hedge fund Alameda Research, defrauding investors of billions. Again, Sam Bankman-Fried sentenced to 25 years in prison for the crime, Brad.

BRAD SMITH: All right, Jennifer, thank you so much. Of course, we've been keeping tabs on this waiting for the sentencing as well throughout the morning here. I've got Seana Smith, Yahoo Finance anchor of "Morning Brief Plus" back here on set with me. Seana, my goodness, I mean, I'm taking a look at some of the cryptocurrencies right now, just trying to get a sense of where this stacks up in the minds of cryptocurrency investors, whether they're holding crypto as an asset or holding some of the companies that touch crypto. And particularly here, I'm not seeing any significant move, and a lot of this to be expected coming into today. Yeah, I think a lot of this was expected.

SEANA SMITH: I think just in terms of the why we aren't seeing maybe a bigger reaction as a lot of this had already been priced in. You talk about the uncertainty. People need to know investors, need to know before investing in crypto. Obviously, this has really been an overhang that has largely been present here. Obviously, within the crypto space more broadly across four investors over the last year. So the fact that we have some clarity here, the fact that the judge did come down and say that he is sentencing SBF to 25 years in prison, yes, it wasn't as much as what the prosecutors were pushing for, again, like Jen was just saying.

They were pushing for 40 to 50 years, that was requested by the prosecutors but Judge Kaplan, though, sentencing SBF to 25 years in prison for the seven counts of conspiracy and for fraud charges, all stemming from the collapse of FTX, shows the severity of this situation and also, obviously, that these types of matters will not be taken lightly, and people will not be treated in any sort of favor or special cases here. Going forward, so again, this really reiterating the fact that Judge Kaplan was not at all hesitant to come down, pretty hard here on SBF, and go forward with that sentencing of 25 years in prison.

BRAD SMITH: You think about some of the key profiles that have had massive downfalls over the last year, this is just the biggest sentencing that we have seen perhaps in the broader crypto landscape as of recent. You look back to Justin Sun and what took place with Tron, and you also have to think back to ultimately where for some of the profiles that have built up themselves and really annexed themselves to some of the largest equity market investors out there. We were just speaking with Anthony Scaramucci of SkyBridge last week who was one of the other major investors, backers of FTX.

He said to our own Anjalee Khemlani during Yahoo Finance Invest last year that Sam Bankman-Fried did something very malevolent. He was wishing to do evil. But was not very forthright at all about what those real intentions were here, and that's what came to light. That's why this proceeding took place and netted out the way it has with this sentence here today as well.

SEANA SMITH: Yeah, and that is exactly what Judge Kaplan reiterated here within the sentencing, saying that it's not a trivial risk here, just in terms of SBF could commit these crimes again. But he was really saying that he had SBF wanted to be a hugely, hugely politically influential person, and we saw the meetings that he held the fact that he was so present on the hill before this conviction, before the charges, before the collapse of FTX. So again sentenced to 25 years in prison in prison. Yes, Zed has maybe some clarity here for the crypto space going forward. But you've got to think that this will be an overhang that has some people-- keep some people on the sideline now for some time to come within crypto.

BRAD SMITH: And for an industry that's had to in past crypto winters move through the ICOs, which is what came to mind for me at least with Tron previously here, and then you fast-forward to what else had to move through algorithm or algorithmic stablecoins. And now, for this to net out the way that it has here, it's a larger question of where the fanfare will continue to linger here within crypto. It certainly has risen on the back of ETFs. But here, Sam Bankman-Fried sentenced to 25 years in prison for those crimes with FTX.