Inside the mind-boggling world of Sam Bankman-Fried. The scruffy crypto ... trends now

Bill Clinton and Tony Blair sat and listened in awe to his young thoughts on the world. Katy Perry was so impressed she mentioned his company in a karaoke song.

Sam Bankman-Fried, the scruffy cryptocurrency king, once had the world’s rich and famous eating out of his unwashed hand.

But the man Silicon Valley experts once predicted could become the world’s first trillionaire is now contemplating another daunting number - as a New York judge has handed down a 25-year prison sentence for masterminding one of the biggest financial frauds on record.

Today’s sentencing by Judge Lewis Kaplan in Manhattan's federal court provided the final act in an astonishing fall from grace for a tech-world golden boy - commonly known as ‘SBF’ - whose business empire went from £21billion to virtually nothing in a matter of days.

The Judge branded him as ‘remorseless’ as he condemned his ‘evasive, hairsplitting’ testimony during the trial. Bankman-Fried acknowledged he made ‘selfish decisions’ that haunt him ‘every day’.

Even though it happened in a dazzlingly new industry that outsiders tend to find mind-bogglingly confusing, SBF’s fraud - stealing digital money from people who believed it was safe with him - was essentially straightforward and almost as old as crime itself.

He set up a cryptocurrency exchange called FTX where owners of these online currencies, the most famous of which is Bitcoin, could store them.

However, SBF fraudulently used these deposits as a $10billion (£8.2billion) slush fund to finance risky stock market investments and a lavish lifestyle that included using private jets, buying a £25million mansion in the Bahamas, making huge political donations and paying himself vast amounts of money.

A childhood maths genius and graduate of the celebrated Massachusetts Institute of Technology, Bankman-Fried rode the largely speculative crypto-boom despite later claiming he barely understood the ‘currencies’.

He became one of the Democratic Party’s biggest funders and was courted by film stars, pop icons, supermodels and even ex-world leaders such as Bill Clinton and Tony Blair who flocked to hear him opine on the future of finance.

According to prosecutors, he hid his crimes by posing as a scatty, socially inept but benign entrepreneur, whose preference for dishevelled clothes reflected a young man who wasn’t interested in wealth but who just wanted to make the world a better place.

He embraced a philanthropic movement known as ‘effective altruism’ which encourages talented people to make as much money as possible so they can donate it to good causes.

But last November, it all came crashing down as the wild-haired 32-year-old - wearing a tan-coloured short-sleeve jail T-shirt for his sentencing - was found guilty on seven fraud and conspiracy charges that stemmed from the spectacular collapse of FTX in late 2022.

Prosecutors demolished his claims that he was just a clueless ‘altruist’ who naively overtrusted his colleagues. He was disorganised, incompetent and even irresponsible, he’d insisted, but not a swindler.

Before announcing today’s sentence, Judge Kaplan reminded the court that Bankman-Fried had lied on the witness stand at his trial at least three times, including when he said he hadn’t known that a hedge fund he had also founded had spent customer deposits taken from FTX. The judge also cited evidence of witness tampering.

Judge Kaplan said he’d found that FTX customers lost $8billion, FTX equity investors lost $1.7billion and lenders to Alameda Research, Bankman-Fried’s hedge fund, lost $1.3billion.

‘The defendant’s assertion that FTX customers and creditors will be paid in full is misleading, it is logically flawed, it is speculative,’ the judge told the court.

‘A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back what he stole.’

Prosecutors had been pushing for a sentence of 40 to 50 years.

‘His life in recent years has been one of unmatched greed and hubris; of ambition and rationalisation; and courting risk and gambling repeatedly with other people’s money,’ the US Attorney’s office had said in a sentencing memo two weeks ago.

Bankman-Fried may well be followed to prison by three of his colleagues, including his on-off girlfriend Caroline Ellison, who have pleaded guilty and are yet to be sentenced.

Although the judge declined to pursue FTX’s investors, saying they weren’t relevant to the charges against SBF, critics say the many celebrities - some paid handsomely for their services - who helped publicise the fraudulent enterprise shouldn’t escape without censure.

For SBF understood the power of celebrity endorsement and needed stars on board to drum up excitement about cryptocurrencies as a secretive industry sought to break free from its traditional association with drug-traffickers and money launderers.

He lavished eye-watering sums on various A-listers, paying American Football icon Tom Brady £45million and his then-wife, Brazilian supermodel Gisele Bundchen, another £16million for just 20 hours of their time making adverts for FTX.