On Thursday, March 28, 2024, a federal judge sentenced Sam Bankman-Fried, the now infamous ex-CEO of FTX Exchange, to 25 years in prison. The sentencing followed SBF’s conviction in November, when he was found guilty of seven criminal counts related to fraud and conspiracy.
The maximum sentence for SBF’s convictions was 110 years, which according to Judge Lewis Kaplan, was “substantially greater than necessary,” as was the requested sentence from the prosecutors.
Shorter Sentence Than Requested
Though the sentence is quite long, prosecutors were aiming to get SBF 40-50 years in prison, rather than 25. Meanwhile, defense attorneys wanted just 6 and a half years for their client. In the end, Judge Kaplan pretty much split the difference with the 25 year sentence. He recommended a medium security prison.
SBF has no possibility of parole for the sentence, but can get time taken off for good behavior. With good behavior, federal prisoners generally can earn up to 54 days of time credit a year, which could result in an approximately 15% reduction in SBF’s sentence.
Warning to Future Fraudsters
The sentence given to SBF is not the most punitive in crypto history, though it is a warning to others who may look to defraud people in a similar way. US attorney Damian Williams shared his thoughts on X:
Changpeng Zhao, former CEO of Binance Exchange, settled with the US DOJ for a large sum of money but seems unlikely to face any sort of prison time.
Do-Kwon, the creator of Terra (LUNA) and the Terra USD stablecoin is still facing legal issues but has yet to be sentenced in any real way.
No one has ever been able to find and punish the founder of QuadrigaCX, Gerald Cotten, but he would likely face some sort of prison time (if he’s indeed alive).
The most punitive crypto sentence in history belongs to Ross Ulbricht, the founder of Silk Road, who was sentenced to life in prison in 2015. Though Silk Road wasn’t explicitly a crypto platform, it was certainly one of the payment methods of choice for the platform.
Closing Thoughts
There are some in the community who think that SBF’s sentence should have been harsher than Ulbricht’s, considering that Ross didn’t actually do anything but create Silk Road, whereas SBF knowingly defrauded customers directly himself.
It seems a bit unfair that someone who directly robbed people of millions of dollars could end up serving as little as 12 years in prison, while a website creator who didn’t do anything got two life sentences. How SBF’s sentence plays out will be interesting to see as the years go by.
Judge Kaplan, noted multiple times the lack of remorse shown by SBF, in addition to the huge risk SBF could pose in the future, as reasons for the length of the sentence. SBF now will appeal the sentence, but whether it will be successful is anyone’s guess.
