Why Europe Must End Its 30-Year Digital Winter to Ensure Its Long-Run Future

SBF May Be 57 When He Finishes Serving Time

When the facts are crystal clear, often the only recourse is to appeal to emotion. That’s the tack that convicted crypto criminal and former FTX CEO Sam Bankman-Fried’s legal defense hewed to on Thursday (March 28) during the fallen wunderkind’s sentencing hearing — but, as it turned out, all the hot air in the world can’t fill the sails of a ship that has already sunk. 

“He is a beautiful puzzle. He can parse words better than a Talmudic scholar,” Bankman-Fried’s defense lawyer told the court about their client, adding that “his mother says there’s a terrific sadness at his core… We ask that you sentence him with a compassionate heart.”

But on Thursday in lower Manhattan, the logos of the rule of law outweighed the appeal of pathos when measured, with finality, on the scales of the senior judge of the United States District Court for the Southern District of New York (SDNY), Judge Lewis Kaplan

Kaplan sentenced the founder of the crypto exchange FTX and Alameda Trading firm, Samuel Bankman-Fried, to 25 years in prison. 

“At the end of the day, the criminal justice system thrives only if it’s seen as fair. People need to feel it is fair, or we’re back to trial by combat. The punishment must fit the seriousness of the crime. And this was a serious crime,” Kaplan said.

In his ruling in favor of the United States in its federal case versus Sam Bankman-Fried, Kaplan noted to the court: “A fortuitous run-up in the value of some cryptocurrencies bears no relation to the gravity of the crimes that were committed. A thief who takes his loot to Las Vegas and successfully bets is not entitled to a sentencing reduction.”

“I reject the defense’s argument about loss, both on the law and on the facts… The crimes here include taking FTX customer money, to which the defendant had no right, and using it on speculative investments by Alameda and a variety of other things,” he added. 

Echoing that sentiment, and in response to Bankman-Fried’s own testimony, Assistant United States Attorney Nicolas Roos told the court: “Samuel Bankman-Fried stole $8 billion dollars. It was theft, from customers spread all over the world. It was a loss that impacted people significantly and caused damage.”

The 25-year sentence handed down Thursday is less than the 40-50 year imprisonment that prosecutors were seeking, and above the five to six years that his defense team had asked for. 

Read also: Sam Bankman-Fried, FTX and the Demise of the Cool Kids

Bankman-Fried: ‘My Useful Life is Probably Over’ 

How federal sentencing works is that each type of crime is assigned a base offense level, which serves as the starting point for determining the seriousness of the particular offense for which the defendant is under sentencing. Judges use what is basically a point system to determine how long a convicted individual should be imprisoned for given the contextual details of their particular case, including taking into account the severity of the crime and the criminal history of the convicted. 

There are 43 levels of offense seriousness, with more serious crimes assigned higher levels. On Thursday, Kaplan told the court that the losses incurred by the criminal actions for which Bankman-Fried was convicted “far exceeded” the top tier of offense. 

“The total offense level is 60. Once you cross 43, it cannot go higher. The guideline is life in prison. But the maximum is 1,320 months in this case,” Kaplan said. 

Kaplan went on to note that Bankman-Fried’s text to FTX’s former general counsel “did in fact constitute attempted witness tampering,” while emphasizing that he committed perjury and gave a false testimony at trial at least three times. 

“When not lying, he was evasive, hair splitting, trying to get the prosecutors to rephrase questions for him. I’ve been doing this job for close to 30 years. I’ve never seen a performance like that,” Kaplan said. 

See alsoFor Sam Bankman-Fried, Pointing Fingers Never Goes Out of Style 

During his testimony before the final sentencing verdict, Bankman-Fried told the court: “My useful life is probably over. It’s been over for a while now.”

Given the former FTX CEO’s track record, it is debatable whether his “useful life” ever truly began.

As PYMNTS CEO Karen Webster wrote at the time of FTX’s collapse, “[this was] a crisis that was largely avoidable if investors had done their job and the media with access to him had done theirs.”