Sam Bankman- Fried was sentenced to 25 years for fraud
The Ex-CEO of FTX, Michael Bankman-Fried, will appear before a Manhattan court hearing on the $nu_f$ penalty
FTX became one of the world’s biggest exchanges after Bankman- Fried co-founded it in 2019. Bankman-Fried and his coconspirators testified that FTX made the exchange look riskier than it was, and that it gave Bankman- Fried’s trading fund access to its customer funds.
The sweeping conviction marked a stunning fall for the 32-year old former CEO who once hobnobbed with celebrities like quarterback Tom Brady and shared stages with world leaders like former President Clinton.
Judge Lewis Kaplan, the experienced no-nonsense judge who presided over Bankman-Fried’s trial will hold a sentencing hearing at a Manhattan courtroom later in the day.
At least $8 billion in customer funds were believed to have been stolen. The money was used to fuel a luxurious lifestyle in the Bahamas and other purposes, according to prosecutors.
Prosecutors are asking for half of the recommended sentence of between 100 and 120 years in prison, though sentencing guidelines recommend it be more.
Ultimately, the decision will be up to Kaplan, a judge who has ruled in high-profile cases including most recently presiding over E. Jean Carroll’s defamation case against former president Trump.
During the Bankman-Fried trial, Kaplan admonished the ex FTX CEO’s lawyers when he felt they were talking about nothing but the case.
At its heart Kaplan will have to weigh this central question: Was Bankman-Fried a criminal mastermind or a young computer geek who simply got in over his head?
Attorneys for Bankman-Fried pushed back against the sentencing recommendation, saying it wrongly depicted the former FTX head as a depraved super villain.
She said the judge would be thinking about how to punish Mr. Bankman- Fried and send a deterrent to the community. “But at the same time, balance the need to give this very young person an opportunity to rehabilitate and have a life.”
FTX’s Sam Kaplan: Why he’s sorry about the loss of his loot, but what he didn’t tell him when he learned about the missing $8 billion
A lot of FTX holdings were held in cryptocurrencies, which have a staged a huge rebound this year, as well as in stakes of other companies that are in the process of being sold off.
He didn’t care that someone could recover the funds that they’ve taken, or lost. “That’s nice. It’s a great thing for recovery, but it doesn’t diminish the amount of the loss.”
Before announcing the sentence, Inner City Press reports that Judge Kaplan called the defense’s claims that people would be paid back speculative, finding that customers of FTX lost $8 billion and that Bankman-Fried attempted to tamper with witnesses, perjured himself, and falsely testified about when he learned of the missing $8 billion.
As Bloomberg reports, despite a jump in the value of FTX’s crypto holdings or its stake in the AI company Anthropic, Kaplan said, “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 all or part of which he stole when he finally gets caught.”
It all suggested that he wasn’t sorry for what he’d done, despite what his lawyers said in the sentencing filing, “Those who know Sam know how deeply, deeply sorry he is for the pain he caused over the last two years.”
The Metropolitan Detention Center Charged with the 2005 August 11th, 2023, Bail-Violating Misdemeanor Jeffrey J. Bankman-Fried
Bankman-Fried is already in custody; he’s been residing in the Metropolitan Detention Center (MDC) since August 11th, 2023, because he violated his bail conditions. His coconspirator and ex-girlfriend had private memos that he sent to The New York Times. At the time, Kaplan said Bankman-Fried had engaged in witness tampering “at least twice.” Bankman- Fried has lost weight in jail because the prison doesn’t offer a vegan diet and he’s also been the target of extortion attempts.
The probation department recommended 100 years in prison, which Bankman-Fried’s lawyers called “grotesque.” Because Bankman-Fried was an older man, they argued that his case was more similar to that of Madoff, who spent over a century in prison. His sentence was symbolic because he was 71. Twelve years went by before he died in jail.
“The defendant is considered as a whole by the court—for his good and his bad,” says Joshua Naftalis, a former US prosecutor and partner at law firm Pallas Partners. If the objective at trial is to assess a “snapshot” of someone’s behavior, he says, the aim of sentencing is to “take a full measure of the man.”
The affair was described as one of the largest financial frauds in history by the US government. Bankman-Fried had shown abrazen disrespect for the rule of law.
In considering the appropriate sentence for Bankman-Fried, the judge was required to take into account a blend of factors beyond the details of the underlying crimes. Those include the extent of the financial losses dealt upon the victims, the defendant’s character and history, whether any obstruction of justice had taken place, the likelihood of recidivism, and so forth.
