Set to be sentenced next week, disgraced FTX founder Sam Bankman-Fried is facing charges that carry a total maximum penalty of over 100 years in prison – but what sentence will he actually get?
In the defense’s sentencing recommendation released late last month, Bankman-Fried’s camp pushed for a maximum prison sentence of just over six years, citing his age and “genuine concern” about other people.
SBF Facing What Could Amount To A Life Sentence
In their own sentencing recommendation released shortly thereafter, prosecutors argued that a six-year sentence would be “woefully inaccurate” and “send the wrong message to the defendant, to others considering committing fraud, to victims, and to society at large,” recommending a prison term of 40 to 50 years for the FTX fraudster.
“Bankman-Fried’s crimes were serious and long-running, causing billions of dollars in losses and significant harm to tens of thousands of victims financially and emotionally,” prosecutors argued. “The sheer enormity of the loss in this case, and the fact that the loss came in the form of stealing of victims’ money, puts Bankman-Fried in a category of defendants where sentences of forty years or more is appropriate.”
Former U.S. Assistant Attorney and white-collar crime expert Kevin J. O’Brien thinks neither of those sentences is likely given that the presiding judge is Judge Lewis A. Kaplan, however.
“Kaplan’s tough – and he has that reputation – but he’s not nasty,” O’Brien said in an interview with Cryptonews. “I don’t think he’s effectively going to put the guy away for the rest of his adult life. He’s going to give him an opportunity to make amends and live a meaningful life outside of prison.”
Is The Defense’s Argument Too Good To Be True?
In their sentencing recommendation, the defense attempted to compare Bankman-Fried to “junk bond king” turned philanthropist Michael Milken and Theranos CEO Elizabeth Holmes, who received 11 and seven years in prison, respectively.
Sorry, but this is psychotic. I get that Sam Bankman-Fried is wildly unsympathetic. But there is no sane reason taxpayers need to keep him locked in a cage until he’s in his 80s. We are totally desensitized to excessively long prison terms in this country. https://t.co/5BHW7lCTDX
— Billy Binion (@billybinion) March 15, 2024
O’Brien is unsure whether those comparisons will necessarily work in the eyes of the law, however.
“Those are smart arguments but there are differences between his case and those cases,” said O’Brien, noting that the “size of the damage was much higher in his case.”
Similarly, O’Brien pointed out that Milken’s “good works” only occurred after his “exit from prison.”
“It’s kind of hard for Bankman-Fried to try to bank on that before he’s even sentenced,” O’Brien continued.
Judge Kaplan Will Do What He Thinks Is Right, O’Brien Says
O’Brien’s comments come amid the March 20 appointment of Unabomber prosecutor Robert J. Cleary by a U.S. bankruptcy judge to probe into the collapse of FTX and its potential conflicts of interest with law firm Sullivan and Cromwell.
Current FTX CEO John J. Ray III has vocally opposed the approval of an independent examiner, citing current management’s independence from the FTX fraudsters.
“There’s a certain amount of politics here because of the responsibility of management for this mess,” O’Brien said of the legal saga, calling it “very much an issue.”
In addition to the parties’ sentencing recommendations, Kaplan will have to follow the U.S. government’s federal sentencing guidelines. If he gives Bankman-Fried a sentence that is too much lower than the recommended punishment, the government could appeal his decision.
“Of course, Kaplan probably doesn’t care,” O’Brien said. “He’s going to do what he thinks is right.”
When asked how long Bankman-Fried’s sentence could be, O’Brien claimed he could see the former “king of crypto” land up to two decades in prison.
“I wouldn’t be surprised if Sam Bankman-Fried got 15 years,” he estimated.
The FTX founder is currently being held at Metropolitan Detention Center in Brooklyn, New York. His sentencing is scheduled for March 28 in Manhattan.
Investigative findings from Cleary’s independent examination are due back in court within 60 days.
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