FTX founder Sam Bankman-Fried sentenced to 25 years in prison: trial timeline

FTX founder Sam Bankman-Fried has been sentenced to 25 years in prison for a massive fraud that doomed his cryptocurrency exchange and its associated hedge fund, Alameda Research. The court also ruled that the billionaire was deprived of more than $11 billion, including property.

The scam that Bankman-Fried pulled off was quite simple: he and his partners created the FTX exchange, which accepted customer deposits for investing and trading in cryptocurrencies. Some of these deposits were secretly transferred to another of his companies, the hedge fund Alameda Research, which was originally created to resolve differences in cryptocurrency prices in different countries.

Below is a timeline of events leading up to the sentencing.

• 2017 - Bankman-Fried quits his job as a trader at Jane Street Capital and launches Alameda Research, specializing in cryptocurrencies.

“I left Jane Street and started Alameda Research because I thought I had to make riskier decisions to accumulate dynastic wealth.”

Sam Bankman-Fried

• 2019 - Bankman-Fried and former Google employee Gary Wang founded FTX as a new platform for trading cryptocurrencies and derivatives;
• 2021 - FTX raises $420 million in venture funding, valued at $25 billion. Bankman-Fried debuts on Forbes' list of billionaires, which estimates his net worth at $22.5 billion;
• 2022 - The NFL's Super Bowl broadcast is replete with FTX ads, signaling the height of craze for the fast-growing asset class;
• June-July 2022 - Bankman-Fried becomes the “white knight” of the cryptocurrency sector amid the collapse in prices for Bitcoin and other digital assets. Alameda provides crypto lender Voyager Digital with a $200 million line of credit, while FTX provides lender BlockFi with a $250 million line of credit;
• November 2, 2022 - Crypto news website CoinDesk publishes Alameda Research's leaked balance sheet, showing the majority of its $14.6 billion in assets held in FTX's native token called FTTT. The token's market capitalization subsequently declined by approximately $400 million, and rival exchange Binance said it would sell its holdings in FTT;
• November 11, 2022 - FTX files for bankruptcy protection in the US after a wave of customer departures and Bankman-Fried steps down as CEO;
• December 12, 2022 - Bankman-Fried is arrested in the Bahamas, where he lives and where FTX is based. The U.S. Attorney's Office in Manhattan later confirmed that a federal grand jury had indicted him on fraud and conspiracy charges;
• December 21, 2022 - Bankman-Fried leaves the Bahamas after agreeing to extradition to the United States. Prosecutors say Wang and Alameda CEO Caroline Ellison pleaded guilty and agreed to cooperate with prosecutors;

“Sam ordered me to commit these crimes. He ordered us to take clients’ money to pay off loans.”

Caroline Ellison, Alameda executive and ex-girlfriend of Bankman-Frida 

• December 22, 2022 - Bankman-Fried makes his first appearance in Manhattan federal court and is released on house arrest at his parents' home in California on $250 million bail;
• January 2023 - Bankman-Fried pleads not guilty and U.S. District Judge Lewis Kaplan sets his trial for October.

“Those who know Sam know how deeply he regrets the pain he has caused over the past two years.”

Bankman-Fried Lawyers

• August 11, 2023 - Kaplan revokes Bankman-Fried's bail after finding evidence that he tampered with evidence, including Ellison's personal records, on two separate occasions;
• August 2023 - Bankman-Fried is incarcerated at the Brooklyn Metropolitan Detention Center awaiting trial;
• October 3, 2023 - Trial begins in Manhattan federal court;
• October 28, 2023 - Bankman-Fried testifies in her own defense, saying many people were hurt when FTX collapsed, but denies wrongdoing;
• November 2, 2023 - Bankman-Fried is found guilty of 7 charges. The Probation Department recommends 100 years in prison.

“Bankman-Fried justified his actions by betting on expected profit, weighing the likelihood of being caught against the likelihood of getting away with it—and that was the game.”

Lewis Kaplan, US District Judge

• March 28, 2024 - Kaplan sentences Bankman-Fried to 25 years in prison and orders the forfeiture of more than $11 billion in assets.

The verdict caps a recent era of cryptocurrencies that was characterized by get-rich-quick schemes riddled with deception, with investors lured by promises of incredibly high returns, from digitally watermarked images to simple percentage payments on the token of the week. Experts suggest that we are now entering a more sober phase of cryptocurrency, where software developers will finally create useful applications.