Sam Bankman-Fried Handed 25-Year Sentence for Role in FTX’s collapse

On March 28, Sam Bankman-Fried (SBF), an ex-cryptocurrency magnate, was sentenced to 25 years in prison for his role in committing one of the biggest financial crimes in the history of the United States.

In November, the 32-year-old was convicted of seven counts of conspiracy, fraud, and money laundering. He was also charged with conspiracy to carry out securities as well as commodities fraud. 

According to federal sentencing regulations, SBF faced up to 110 years in prison. However, prosecutors had urged Judge Lewis Kaplan to sentence him to between 40 and 50 years behind bars due to the ‘historic fraud.’

Judge Hands 25-Year Sentence to Bankman-Fried

The accused’s lawyers had suggested a sentence not exceeding six and a half years because the possibility of reoffending was low. 

At the March 28 hearing, the judge claimed the 25-year sentence indicated ‘a possibility of the accused being in a position to do something wrong in the future. Besides, the risk is not insignificant.’ The judge also noted that the sentence ‘sought to incapacitate him to a level that can suitably be done for a considerable time frame.’ 

According to Damian Williams, United States Attorney for the Southern District of New York, the sentence is ‘a critical message to persons intending to execute financial crimes that justice will be quick, and penalties will be serious.’ SBF’s lawyers claimed the accused never planned to defraud clients, hence the need for Judge Kaplan to show mercy. 

Marc Mukasey, a defense attorney, said SBF was not a cruel financial killer whose mission was to hurt others. According to him, the accused was an ‘awkward math nerd’ who attempted to refund clients’ funds following the collapse of FTX. 

Minimal Window for Bankman-Fried to Appeal Successfully 

Despite SBF being expected to appeal his sentence, Andrey Spektor, an ex-federal prosecutor, the chances of the decision being reversed are minimal. According to him, nothing can be done. He also claimed that SBF could have been awarded a longer sentence, but him and his family are not celebrating a 25-year term.

According to some legal professionals, SBF’s professional links and education was supposed to bring a level of leniency. However, some anticipated a severer sentence. Anat Alon-Beck, a business law professor at Case Western Reserve University, sad she was more or less in the middle. 

She recognized that the judge would make him responsible for this deeds. Further, the professor compared SBF’s sentence to that of Elizabeth Holmes, the fallen Silicon Valley entrepreneur who was imprisoned for 11.5 years for swindling investors. She said that concerning Bankman-Fried, the sentence was more than double.

During the sentence hearing, SBF asked for forgiveness from his ex-FTX colleagues. He said that despite their efforts, he threw it all away, something that haunts him daily. He also said he was sorry for everything that took place at each stage and for things he ought to have done and said and those he should have not.

SBF’s conviction last fall came after the surprising fall of FTX in 2022. He had cofounded and led as chief executive officer of this cryptocurrency trading platform, despite a fund deficit of $8B. During trial, he was accused of utilizing depositor money to fund his failing hedge fund. Additionally, he was accused of utilizing the funds to make donations to various causes and purchase luxury properties in the Caribbean. 

At one point, FTX was the second-biggest crypto exchange in the globe, permitting users to purchase and sell several virtual currencies. At the same time, SBF’s wealth was approximately more than $30B. 

Using investors’ funds, he took out a Super Bowl advert to promote his exchange. He also purchased the naming rights to an arena utilized by the NBA’s Miami heat. However, cryptocurrency prices fell in 2022, crippling FTX and finally leading to its collapse. 

Alameda Research, FTX’s hedge fund affiliate, had generated a significant amount of dollars in crypto investments that fell in value. According to prosecutors, SBF attempted to use FTX client funds to bolster Alameda’s balance sheet.

Three ex-FTX associates gave testimonies against SBF after he pleaded guilty to associated crimes. One of them was Caroline Ellison, his ex-romantic partner, who claimed that he had coerced her into committing fraud.