How do all the celebrities and politicians who fawned over the Crypto King feel now he’s been jailed for 25 years after being exposed as a fraud? TOM LEONARD reports

Bill Clinton and Tony Blair sat and listened in apparent awe to his words of wisdom. Katy Perry was so impressed with him and his philosophy she mentioned his company in a karaoke song.

Even smouldering Brazilian supermodel Gisele Bundchen was happy to sit alongside him and promote his company FTX.

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

But the man Silicon Valley experts once predicted could become the world’s first trillionaire is now contemplating another daunting number – after a New York judge handed down a 25-year prison sentence for masterminding one of the biggest financial frauds on record. Prosecutors had been seeking a prison term of 40 to 50 years after a jury found Bankman-Fried guilty in November following a five-week trial but yesterday’s sentencing by Judge Lewis Kaplan in Manhattan

federal court is nevertheless a crushing blow to a tech-world golden boy commonly

known as ‘SBF’. The judge branded him ‘remorseless’ as he condemned his ‘evasive, hairsplitting’ testimony during the trial. Bankman-Fried, 32, 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 off 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 online currencies – the most famous of which is Bitcoin – could store them.

However, SBF fraudulently used these deposits – as well as money from investors and lenders – as a $10billion (£7.9billion) slush fund to finance risky stock market investments and a lavish lifestyle that included acquiring a £25million mansion in the Bahamas, buying two private jets, making huge political donations – and paying himself vast amounts of money.

The judge said Bankman-Fried’s sentence was meant to ‘disable him’ from the ability to commit another fraud for a long period of time. ‘There is a risk that this man will be in a position to do something very bad in the future and it’s not a trivial risk. It’s not a trivial risk at all,’ said Kaplan.

Although the judge ordered SBF should pay back $11billion, the accused claimed after his arrest in November 2022 that he has ‘close to nothing’. He insisted he had all his assets in the now-bankrupt FTX exchange and sister trading house Alameda Research, and had no ­hidden funds.

In response to the sentencing, Bankman-Fried’s parents – who were in court – issued a statement in which they said they are ‘heartbroken and will continue to fight for our son’. He has already announced he will appeal.

So was SBF a well-meaning and brilliant but ultimately hapless and naive entrepreneur whose ambitions ran away with him? Or was he a

cynical and manipulative criminal mastermind who set out to

defraud others?

His sentencing strongly suggests the judge believes he was the latter. It concludes a dramatic fall from grace for a childhood maths genius and graduate of the Massachusetts Institute of Technology whose business empire went from £21billion to virtually nothing in a matter of days.

Bankman-Fried rode the largely speculative crypto boom despite later claiming he barely understood the currencies. He became one of the Democrat Party’s biggest funders and was courted by film stars, pop icons, supermodels and the likes of Mr Clinton and Mr Blair, who flocked to speak at his business summits and 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 and a Toyota Corolla car 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 use it to do good and donate to worthy causes.

There were also eye-popping reports that Bankman-Fried shared his luxurious five-bedroom property in the Bahamas with nine flatmates – people he knew either from university or through his first job on Wall Street – in an arrangement known as a ‘polycule’, a polyamorous relationship in which they were in and out of sexual relationships with each other. But reports of wild sexual couplings were later disputed.

It was last November that it all came crashing down as the wild-haired young man 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 had insisted he was disorganised, incompetent and even irresponsible, but not a swindler.

Judge Kaplan concluded differently. Before announcing SBF’s sentence, he 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 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.’

In a sentencing memo two weeks ago, the US Attorney’s office had said: ‘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.’

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

And while 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 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, supermodel Gisele Bundchen, another £16million for just 20 hours of their time making adverts for FTX.

He also splashed out £8million on actor Larry David, star of TV comedy Curb Your Enthusiasm, to appear in a 60-second commercial that was shown on US TV – at the very peak of prime time – during the Super Bowl. According to SBF’s biographer Michael Lewis, FTX had agreed a deal to pay the superstar singer Taylor Swift between £20million and £25million a year just to plug the company, but he later backed out.

Lewis detailed how SBF first met many of his future celebrity pals at a dinner party in February 2022, held at the Beverly Hills mansion of Hollywood agent turned investor Michael Kives.

The guest list – including Hillary Clinton, Leonardo DiCaprio, Katy Perry, Amazon boss Jeff Bezos, actors Orlando Bloom and Kate Hudson and at least four members of the Kardashian family – was so impressive (not to mention unlikely) that SBF’s staff thought it might be a ruse.

In fact, his underlings convinced themselves the dinner could be a kidnap attempt by criminals who knew SBF was a billionaire with no bodyguards.

After flying out with him from the Bahamas, a senior FTX executive, accompanied by a small ­‘rescue team’, duly waited outside the party in a car ready to ‘storm’ the house and extract him.

In the event, he was led out to the back lawn, dressed in his customary cargo shorts and T-shirt, and found that the 50-strong guest list was just as billed. ‘I think it’s real,’ he texted his team outside.

The socially awkward SBF emerged from his shell to chat with Mrs Clinton and Ms Perry who, during a karaoke session that evening, sang a song with lyrics changed to reference FTX. The next day the singer jokily gushed on Instagram she was leaving music to become an FTX intern.

The charm offensive paid off. His celebrity guests, who had heard so much about the financial genius who could bring respectability to the shady world of cryptocurrencies and make them even richer, were impressed by him.

Two months later, when FTX held a four-day conference in April at a Bahamas resort, some of those he’d met at the party or other celebrities associated with them flocked to attend the $3,000-a-ticket event. Attendees of Crypto Bahamas, held at the Grand Hyatt Baha Mar hotel, queued to pose for a selfie with SBF, who took part in many of the debates.

Those who agreed to sit down and solemnly chat with the conman – including Mr Blair and Mr Clinton for a session entitled The World Today – must be cringing with embarrassment now.

Predictably, those involved in the event had little to say when, just a few months later, FTX collapsed and SBF was arrested. They may have had no idea about the fraud, but no one came out of this looking good. Equally embarrassed by links with SBF is the Democratic Party, which took millions of dollars of his money and later allowed him to help steer legislation on cryptocurrencies. Joe Biden’s 2020 election campaign received $5million and SBF showered a jaw-dropping $40million on favoured candidates’ (most of them Democrats) subsequent ­congressional elections.

But the great and the good anxious to court SBF didn’t come much more eager than Vogue’s editor-in-chief Dame Anna Wintour who reportedly had a humiliating encounter with SBF during a Zoom video chat, according to Michael Lewis. The pair had been put in touch with each other by Bundchen. If the notoriously haughty Vogue supremo knew SBF was actually playing a video game while pretending to listen to her wittering on about her annual, celebrity-packed Met Gala charity ball in New York which she wanted him not only to attend but to finance, it appears she didn’t let on.

SBF had flown by private jet from the Bahamas to Los Angeles in February 2022, taking with him just his laptop and a change of underwear, for a string of business meetings and parties. One morning, while he was staying in LA’s Beverly Hilton hotel, British-born Wintour popped up on his screen.

‘Sam didn’t really know who Anna Wintour was,’ wrote Lewis. ‘Natalie [his assistant] and others had briefed him, but he hadn’t paid attention.’

SBF was, however, contemptuous of the fashion world. As Wintour began to speak, ‘he clicked a button and she vanished from his screen’. Instead, he started playing his favourite video game, Storybook Brawl, in which fantasy creatures battle for supremacy.

Still able to hear her on his headphones, he would answer ‘Yup’ to everything she said. SBF ended the call leaving Wintour under the distinct impression he would not only be her special guest on the red carpet, but ‘might even pay for the entire thing’.

Over the ensuing weeks, his staff asked Louis Vuitton to come up with a high-fashion version of his ubiquitous T-shirt and cargo shorts and also paid Tom Ford to design a ‘more conventional outfit, complete with £53,000 cufflinks’.

When, at the last minute, SBF’s assistant told Wintour’s people he wasn’t going, they were reportedly furious, shouting that ‘Sam will never set foot in fashion again’.

Given that he can expect to spend the next 25 years in a federal prison, that is almost certainly true.