Sam Bankman-Fried was sentenced to 25 years in prison for a cryptocurrency fraud that unraveled with the collapse of FTX, once one of the world’s most popular digital currency exchange platforms. pic.twitter.com/EmwnT0ouPO — The Associated Press (@AP) March 28, 2024 Here's a peek into the sentencing hearing that ended with Sam Bankman-Fried receiving 25 years …
Late Night Moderate Justice Open Thread: Sam Bankman-Fried Sentenced to 25 YearsPost + Comments (82)
Bankman-Fried’s lawyer, Mark Mukasey, delivered the statement for the defense team. Though briefly stating that his team and Bankman-Fried were sympathetic to the victims and their pain, he launched into a hagiography of Bankman-Fried in which he portrayed him as a good, kind, and beautiful person…
Finally, he asked for lenience, appealing to sympathy: “I’m asking the Court not to destroy the prime of this complicated, brilliant, gentle, complex, kind young man’s life. Don’t deprive him of the opportunity to meet a partner or have a baby or work at a charity or teach kids or use his beautiful mind.”
Mukasey did a halfway decent job, I think. Better than Bankman-Fried’s previous, somewhat bumbling defense team. But even more capable lawyers apparently couldn’t stop Sam Bankman-Fried from being Sam Bankman-Fried…
[SBF] began by acknowledging Sunil Kavuri’s victim statement, even agreeing with him that funds were being squandered by the bankruptcy team. He repeated his tired claims that the money is all still there, and claimed that the estate has billions of excess dollars with which it could repay all creditors in-kind or at current crypto prices, and reimburse investors.He spoke of his mistakes, but then explained that he was referring to his decision to declare bankruptcy and relinquish control of the company — not to the decision to misappropriate billions of dollars of customer assets. He acknowledged that he was among the people who had “failed” customers — but couldn’t help but spread the blame around to some others, too.
[Prosecutor Nick] Roos pushed back against Bankman-Fried’s claims that the collapse was simply a “liquidity crisis or an act of mismanagement or poor oversight from the top”, as established at trial…
And he ended his statement in a bizarre and probably ill-advised way: by claiming that “there is a big opportunity in the world to do what the world thought I would do” — that is, start a lucrative cryptocurrency business…Roos described destroyed lives, bankrupted companies, and lost jobs.
And finally, he described the likelihood that Bankman-Fried would reoffend. He pointed to Bankman-Fried’s misconduct while on pre-trial release, his efforts and ideation around rebranding himself, and his statements about creating a new cryptocurrency exchange. He drew upon the defense’s own statements that Bankman-Fried acts not with malice, but with math: “While the line sounds good, it’s troubling because what it says is that if Mr. Bankman-Fried thought the mathematics would justify it, he would do it again.”
Finally, [Judge] Kaplan explained that he shared the prosecution’s concern that Bankman-Fried would reoffend. “There is absolutely no doubt that Mr. Bankman-Fried’s name right now is pretty much mud around the world, but one of the things he is is persistent, and another of the things he is is a great marketing guy,” said Kaplan. His media tour, pre- and post-arrest, demonstrated that he knew how to present a revised version of events. “The mistakes were made, other people are to blame, the bankruptcy people screwed up, this lawyer had a conflict of interest, that lawyer the other thing. [It] doesn’t take much of an intonation to see the outlines of the campaign.” Kaplan explained that his ultimate sentence would be, in part, focused on making Bankman-Fried unable to embark on such an endeavor.
He wrapped up: “The judgment has to adequately reflect the seriousness of the crime, and this was a very serious crime.”…
Can’t extract every point worth covering here, so go read the whole thing!
Per the Associated Press, “Fallen crypto mogul Sam Bankman-Fried sentenced to 25 years in prison”:
… Though he described Bankman-Fried as “extremely smart,” U.S. District Judge Lewis A. Kaplan delivered a blistering analysis of Bankman-Fried and his crimes before announcing a sentence that was half of what prosecutors sought and less than a quarter of the 105 years recommended by the court’s probation officers…
Kaplan said the sentence reflected the risk that Bankman-Fried “will be in position to do something very bad in the future. And it’s not a trivial risk at all.” He added that the sentence was fashioned “for the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”
Kaplan said he would advise the Federal Bureau of Prisons to send Bankman-Fried to a medium-security prison near San Francisco because his notoriety, his association with vast wealth, his autism and social awkwardness are likely to make him especially vulnerable at a high-security facility…
Per the Washington Post:
… Under federal rules, Bankman-Fried probably will serve more than 21 years in prison before he can be eligible for release. Kaplan said he should serve his sentence in a low- or medium-security institution near his parents’ home in the San Francisco Bay Area. Although he castigated Bankman-Fried, the judge said the prosecution’s sentencing request was “substantially greater than is necessary.”
The 25-year sentence is longer than most sentences for high-profile white-collar crimes, although Bernie Madoff received a 150-year sentence in 2009 for running a Ponzi scheme that cost victims an estimated $20 billion or more; he died in prison 12 years later. Elizabeth Holmes, who took in hundreds of millions from investors for blood-testing start-up Theranos, was sentenced in 2022 to more than 11 years in prison…
Bankman-Fried on Thursday claimed that FTX still had the money, spread across various accounts and investments, to fully restore customers’ funds. “There’s plenty of assets to do that,” he said. “There’s billions more. It’s been true the whole time.”
John Ray III, who is leading the company through the bankruptcy process as chief executive, had criticized that stance in a letter to the court. The defense’s assertion that FTX customers and investors suffered no harm is “callously and demonstrably false,” Ray wrote before Thursday’s hearing.
Bankman-Fried cast aspersions on that ongoing bankruptcy and said FTX’s problems amounted to a “liquidity crisis” that should have lasted only a few weeks. But Roos took issue with that view. “It wasn’t a liquidity crisis or an act of mismanagement or poor oversight from the top,” the prosecutor said. “It was the theft of billions of dollars.”…
The case has affected the whole cryptocurrency industry. University of Richmond law professor Carl Tobias pointed to FTX’s collapse as motivation for the Biden industry’s push to regulate cryptocurrency companies: “It’s Exhibit A for arguing to regulate this as we regulate other activities, especially in the stock market.”
Frustration for some of Bankman-Fried's victims who hoped for stiffer sentence https://t.co/iTjRriD1cm pic.twitter.com/Svy1PXAsfk
— Reuters (@Reuters) March 28, 2024
Sam Bankman-Fried has just been sentenced to 25 years in prison
remember when some supposedly very smart people were so sure he wasn't even going to be investigated pic.twitter.com/S2Kkq59l3l
— Matt Binder (@MattBinder) March 28, 2024