Former FTX CEO, Sam “SBF” Bankman-Fried, is set to face a crucial hearing on March 28th, where he will discover whether his time in federal prison is coming to an end or just beginning. This comes after his conviction on seven felony charges. The hearing will take place in the United States District Court for the Southern District of New York, and it is likely to mark the conclusion of a complex case that began with the collapse of FTX in November 2022 and continued with Bankman-Fried’s arrest, extradition, trial, and subsequent conviction.
In November 2023, a jury found SBF guilty of several charges, including wire fraud, securities fraud, commodities fraud, and money laundering. Bankman-Fried’s defense team was the first to submit a sentencing recommendation, proposing a prison term of 6.5 years for his actions, which resulted in FTX investors losing access to millions of dollars.
The seven felony counts carry a maximum sentence of 110 years. Prosecutors have recommended that Bankman-Fried serve between 40 and 50 years in order to “reflect the seriousness of the defendant’s crimes.” However, the final decision rests with Judge Lewis Kaplan, who will consider the details of the case and the impact on the victims and affected parties.
Mark Bini, a former Assistant U.S. Attorney, predicts that Bankman-Fried will receive a sentence of around 30 years or possibly more. He highlights a significant dispute between the government and the defense regarding the amount of loss incurred, as this plays a crucial role in determining the sentencing guidelines.
Bini explains that Judge Kaplan will consider the amount lost at the time of FTX’s collapse, rather than any proposed repayment plan put forward during the firm’s bankruptcy proceedings. Some of these plans involve reimbursing FTX users in fiat currency, based on prices from November 2022. However, many have expressed concern that this approach would cause them to miss out on the recent surges in the value of cryptocurrencies such as Bitcoin (BTC) and other tokens.
In a victim impact statement to the court, an unidentified FTX user, who has two children, expressed the devastation caused by Bankman-Fried’s actions, stating that they did not agree to the risks he took with their funds.
Bankman-Fried’s case is significant as it represents uncharted territory for a high-profile figure from the digital asset space going through a full trial and being convicted and sentenced. In comparison, Ross Ulbricht, the creator of the Silk Road marketplace, received two life sentences without the possibility of parole in 2015, while Elizabeth Holmes, the founder of Theranos, was sentenced to over 11 years for making exaggerated or false claims about the firm’s blood-testing technology.
In the crypto world, 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. He is scheduled to be sentenced in April. Former Celsius CEO Alex Mashinsky, who is charged with defrauding and misleading customers, is set to go to trial in September.
According to Bini, CZ’s case is unlikely to be greatly impacted as it is quite different from Bankman-Fried’s. However, the outcome of Mashinsky’s case could have significant consequences, especially since the defense attorney representing SBF is also involved in the Mashinsky trial. Both cases are being handled in the Southern District of New York, and although they are not identical, Mashinsky will undoubtedly be paying close attention.
Bankman-Fried’s sentencing hearing is scheduled to commence at 9:30 am ET in New York on March 28th. This will be his first appearance in court since waiving a potential conflict of interest for his lawyers. It remains unclear whether SBF’s family will be present at the hearing.