The rise and fall of Sam Bankman-Fried, from cryptocurrency fame to prison sentence

Sam Bankman-Fried, the disgraced cryptocurrency executive who was convicted of fraud in the spectacular collapse of the crypto exchange FTX, was sentenced to 25 years in prison on March 28, 2024.

The sentence, handed down by a federal judge in New York, capped an incredible fall from grace for a young financier who was once the poster boy for the emerging crypto industry before he joined the likes of Bernie Madoff as one of America’s biggest financial fraudsters ever.

Let’s have a look at SBF’s journey.

SBF co-founded FTX in 2019 with American computer programmer Gary Wang. As the COVID-19 pandemic later boosted cryptocurrency trading worldwide, FTX rode the wave to grow. In 2020, FTX purchased Blockfolio, the market’s leading mobile news and portfolio tracking app, for $150 million. SBF appeared as a speaker at various crypto and blockchain conferences, attracting a large following.

Soon SBF and FTX became trustworthy names in the crypto space, emerging as saviors for troubled companies. FTX acquired LedgerX, a derivatives trading platform, bought crypto lending platform Voyager, and saved BlockFi.

In 2021, sports became a popular destination for cryptocurrency firms due to the youth-driven nature of both industries. SBF understood that early and spent $135 million on naming rights for the Miami Heat’s home arena. That changed the name of American Airlines Arena to FTX Arena. His company also signed a long-term partnership with Major League Baseball, and as part of the agreement, the company’s logo would appear on the uniforms of players and umpires.

He became a crypto sensation, earning a spot on Forbes’ 30 Under 30 list as the world’s youngest billionaire at 29 years old. Gen Z crypto fans loved his casual t-shirt and shorts.

In November of 2022, the crypto news website CoinDesk reported on FTX’s poor balance sheet and liquidity crisis. Big names such as Binance opted not to provide any support to FTX or Bankman-Fried.

The cryptocurrency exchange collapsed overnight, resulting in a loss of $10 billion in customer funds. This had a ripple effect on other crypto companies, throwing them into financial turmoil.

Several companies with direct or indirect connections to FTX — including BlockFi, Voyager, Celsius, Genesis, and Gemini — went bankrupt in a matter of weeks. The cryptocurrency market saw its darkest phase, resulting in a loss of more than $1 trillion, and Bitcoin’s price dropped below $18,000.

Federal prosecutors filed both criminal and civil charges against Sam Bankman-Fried and other top FTX executives in late 2022. They were accused of misappropriating $10 billion in customer deposits and with generating false financial statements.

The court trials of FTX’s top executives gained widespread attention — as did their dating lives.

In November of 2023, a federal jury in New York convicted Bankman-Fried of fraud for stealing at least $10 billion from customers and investors.

On March 28, a federal judge sentenced Sam Bankman-Fried to 25 years in prison for his involvement in the massive fraud and conspiracy. Judge Lewis Kaplan also ordered the forfeiture of $11.2 billion in assets.

Before he was sentenced, Bankman-Fried addressed the courtroom and apologized. “A lot of people feel really let down, and they were very let down, and I am sorry about that,” he said. “I am sorry about what happened at every stage. And there are things I should’ve done and things I shouldn’t have.”

He said FTX’s downfall’s “haunts” him every day and that he repeatedly made bad decisions while leading the company. He said seeing FTX customers suffer was painful.

“My useful life is probably over,” he said. “It’s been over for a while now.”