Yesterday, Judge Lewis Kaplan sentenced former FTX CEO Sam “SBF” Bankman-Fried to 25 years in prison for crypto fraud and recommended placing him in a medium-security facility. He's also be ordered to forfeit $11 billion in assets.
Last November, Bankman-Fried was found guilty of two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy, and one count of money laundering conspiracy. The maximum possible sentence for the former crypto billionaire is 110 years.
Earlier this month, the prosecutors proposed a 40-to-50-year sentence pointing out the seriousness of the crime and the number of victims. The prosecution believes that several documents prove that SBF “is motivated to launch his redemption narrative” and can bring more harm to society if he is released at a young age:
“The Government urges the Court to impose a sentence that underscores the remarkably serious nature of the harm to thousands of victims; prevents the defendant from ever again committing fraud; and sends a powerful signal to others who might be tempted to engage in financial misconduct that the consequences will be severe,” - stated the prosecution in the government’s sentencing memorandum.
Sam Bankman-Fried and his legal team asked for a maximum sentence of six and a half years calling him a “selfless, altruistic young man”, emphasizing his vegan lifestyle, and highlighting the fact customers will (allegedly) be fully repaid.
“When the factors are considered, including Sam’s charitable works and demonstrated commitment to others, a sentence that returns Sam promptly to a productive role in society would be sufficient, but not greater than necessary, to comply with the purposes of sentencing,” - stated the defense.
Judge Kaplan stayed in the middle: the final sentence was half what prosecutors sought, but significantly longer the defense wanted. He rejected the defense claim that eventually there was no loss if the funds were to be refunded, calling the defense argument “misleading, logically flawed and speculative.” Kaplan also found SBF guilty of witness tampering and had commited perjury when testifying that he did not know that Alameda had spent FTX customer deposits. He stated that these facts had an impact on the final sentence.
SBF partially acknowledged his mistakes in his final statement, saying that as the CEO he is responsible for the damage to customers who "don't deserve any of that pain" and adding that the FTX collapse “haunts him every day.” Still, he believes that FTX could have been saved if not shut down. His attorney added that the real motivations of his client were “misapprehended and misunderstood.”
The prosecution seems satisfied with the result, claiming that it will be “an important message” to those tempted to commit a financial crime.
Other personalities associated with FTX, including Gary Wang, Caroline Ellison, Nishad Singh, and Ryan Salame, pleaded guilty and accepted deals. They are expected to receive far more lenient sentences. Salame was the only former executive who didn’t testify at SBF’s trial. He will be sentenced on May 1.
Although Bankman-Fried doesn’t have the right to parole in the federal system, he may be released after a few years for good behavior. Still, he plans to appeal his conviction and sentence, and his parents are set to “continue to fight" for their son. “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 at all,” - Judge Lewis Kaplan said before announcing the sentence. Well, time will tell and we will continue to Observe.
