Former FTX CEO, Sam “SBF” Bankman-Fried, will soon find out whether his time in federal prison is coming to an end or just beginning. On March 28, Judge Lewis Kaplan will preside over the sentencing hearing at the United States District Court for the Southern District of New York. This marks one of the final times that Bankman-Fried will appear in person for his criminal case, which began with the collapse of FTX in November 2022 and has since involved his arrest, extradition, trial, and conviction.
In November 2023, a jury found Bankman-Fried guilty on seven felony charges, including wire fraud, securities fraud, commodities fraud, and money laundering. His lawyers were the first to submit a sentencing recommendation, proposing a prison term of 6.5 years for the actions that resulted in FTX investors losing access to millions of dollars.
While the maximum sentence for the seven felony counts is 110 years, prosecutors have recommended a term of 40 to 50 years to reflect the severity of Bankman-Fried’s crimes. However, Judge Kaplan will ultimately decide the sentence, taking into account the specifics of the case and the impact on the victims and affected parties.
Legal experts speculate that Bankman-Fried could potentially receive a sentence of around 30 years or more, depending on Judge Kaplan’s interpretation of the case. The dispute between the government and the defense primarily revolves around the amount of loss incurred, which plays a significant role in determining the sentencing guidelines.
It is worth noting that the guidelines require Judge Kaplan to consider the loss at the time of FTX’s collapse, disregarding any proposed repayment plans in the company’s bankruptcy proceedings. Some of these plans involve reimbursing FTX users in fiat currency based on November 2022 prices, causing concerns among users who would miss out on recent price surges in cryptocurrencies like Bitcoin (BTC) and others.
FTX users who have been impacted by Bankman-Fried’s actions have expressed their grievances in victim impact statements. One user, who remains unidentified, shared how their life has been ruined by the ordeal and expressed their disagreement with the risk Bankman-Fried took with their funds, especially considering they have children to support.
Bankman-Fried’s case is significant in the digital asset space, as it involves a high-profile figure going through a full trial and receiving a conviction and sentence. In contrast, other notable cases, such as Ross Ulbricht, the creator of the Silk Road marketplace, and Elizabeth Holmes, founder of Theranos, have also received severe sentences for their respective crimes.
Looking ahead, former Binance CEO Changpeng “CZ” Zhao has pleaded guilty to a felony count related to the failure to maintain an effective Anti-Money Laundering program at the crypto exchange and is awaiting sentencing in April. Additionally, former Celsius CEO Alex Mashinsky, who is charged with defrauding and misleading customers, is scheduled to go to trial in September. These cases could have significant implications, especially Mashinsky’s, as he shares the same defense attorney as Bankman-Fried and both cases are being heard in the Southern District of New York.
Bankman-Fried’s sentencing is set to commence on March 28 at 9:30 am ET in New York. This will be his first court appearance after waiving a potential conflict of interest for his lawyers. It remains uncertain whether Bankman-Fried’s family will be present at the hearing.