Former FTX CEO Sam “SBF” Bankman-Fried will be facing a judge on March 28 to determine whether his time in federal prison is coming to an end or just beginning after being convicted on seven felony charges. This hearing, taking place in the United States District Court for the Southern District of New York, will likely mark the conclusion of the case, which started with the collapse of FTX in November 2022 and continued with Bankman-Fried’s arrest, extradition, trial, and conviction.
In November 2023, a jury found SBF guilty of charges including wire fraud, securities fraud, commodities fraud, and money laundering. Bankman-Fried’s lawyers were the first to submit a sentencing recommendation, proposing that he serve 6.5 years in prison for his actions that led to FTX investors losing access to millions of dollars.
The seven felony charges carry a maximum sentence of 110 years. Prosecutors have recommended a sentence of 40 to 50 years for Bankman-Fried to reflect the seriousness of his crimes. However, the final decision rests with Judge Lewis Kaplan, who will consider the details of the case and take into account the victims and affected parties.
Mark Bini, a former Assistant U.S. Attorney and current partner at law firm Reed Smith, predicts that Bankman-Fried may receive a sentence of around 30 years or possibly more. Bini explains that there is a disagreement between the government and the defense regarding the amount of loss caused by Bankman-Fried’s actions, as this plays a significant role in determining the sentencing guidelines.
Bini further mentions that Judge Kaplan will likely base his decision on the amount lost at the time of FTX’s collapse, rather than any repayment plan proposed by the firm during bankruptcy proceedings. Some users have expressed concerns that the proposed plan would reimburse them in fiat currency, causing them to miss out on the recent price surges of cryptocurrencies like Bitcoin.
One impacted FTX user, who remains unidentified, shared in a victim impact statement that their life had been completely destroyed, emphasizing that they did not agree to the risk taken by Bankman-Fried with their funds.
Bankman-Fried’s case is noteworthy as it involves a prominent figure from the digital asset space undergoing a full trial, conviction, and sentencing. Other high-profile cases include Ross Ulbricht, the creator of the Silk Road marketplace, who received two life sentences without parole in 2015, and Elizabeth Holmes, the founder of Theranos, who was sentenced to over 11 years for misleading claims about the company’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 and 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.
While it is unlikely that CZ’s case will be significantly affected, as it is different in nature, Bini suggests that Mashinsky’s case could have significant consequences. Both Mashinsky and Bankman-Fried are represented by the same defense attorney and their cases are being heard in the Southern District of New York. Bini believes that Mashinsky will be closely observing Bankman-Fried’s sentencing.
Bankman-Fried’s sentencing is set to begin at 9:30 am ET in New York on March 28, marking 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.