Sam Bankman-Fried Sentenced to 25 Years for Stealing Billions: Is it Really Enough?

Yvonne Kiambi

Sam Bankman-Fried (SBF), the once golden boy in the crypto space, received a 25-year-old sentence just days ago, marking an end to the most high-profile case in the crypto space.

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While some cheered the apparent justice for his crimes, others questioned the effectiveness of the sentence. This case isn’t just about SBF, it’s about the future of the crypto industry which is still in its infancy.

Billions Were Lost and Lives Shattered

Let’s not mince words. Sam Bankman-Fried committed financial crimes that saw billions of dollars under his care by the FTX customers spent on his lavish lifestyle and propping up his failing Alameda Research hedge fund.

During the trial, jurors did not accept Bankman-Fried’s narrative of the FTX fall, ultimately convicting him on seven criminal charges in November and holding him accountable for the loss of approximately $10 billion in customer funds linked to the securities fraud conspiracy.

According to prosecutors, Bankman-Fried orchestrated a scheme to embezzle customer funds for various purposes, including investments, political contributions to Democratic and Republican causes, personal expenses, and repaying loans obtained by Alameda Research.

Is 25 Years Really Enough for SBF?

Here’s the thing: the American justice system, flawed as some think it may be, isn’t built solely on vengeance.  Rehabilitation, the belief in a person’s capacity to change, is also a core principle.

According to U.S. sentencing guidelines, SBF was facing a possible sentencing of 110 years due to his crimes. The Department of Justice, understandably, pushed for a 40-50 year sentence, citing deterrence and public safety for two counts of fraud and five counts of conspiracy.  Seemingly, they aimed to send a message to the crypto community.

According to Judge Lewis Kaplan, as he issued the 25-year sentence to Bankman-Fried, the sentence is more than necessary.

However, public opinion is divided, with most believing the sentence is too lenient. This is because Sam Bankman-Fried betrayed the trust of his investors, customers, and employees. Numerous victim statements highlighted the financial hardship he caused them following the collapse of FTX, along with the disruption to customers. Additionally, Judge Kaplan mentioned that Bankman-Fried attempted to obstruct justice and committed perjury on three occasions.

According to U.S. law, Bankman-Fried needs to serve at least 85% of the 25-year term, meaning the 32-year-old could potentially be released in his early 50s.

SBF’s Defence Sought Lower Sentencing

During his sentencing hearing, assistant U.S. attorney Nicolas Roos refuted Bankman-Fried’s portrayal of FTX’s collapse, arguing that it was not due to a liquidity crisis or mismanagement as SBF had earlier testified, but rather the theft of billions of dollars of customer funds worldwide.

On the other hand, Bankman-Fried’s defense attorney, Marc Mukasey, appealed for leniency, citing his client’s psychological struggles, including chronic sadness and an inability to experience pleasure or happiness.

Mukasey depicted Bankman-Fried as an awkward math enthusiast with a good work ethic, comparing him to a complex puzzle rather than a ruthless financial predator. He argued against Bankman-Fried’s imprisonment, suggesting it was an overly harsh punishment.

Sam Bankman-Fried’s Apology

Sam Bankman-Fried expressed remorse for letting down many individuals and acknowledged the pain he caused through FTX’s eventual collapse. He recognized the loss of something precious he created along with his co-workers at FTX, a company once valued at $32 billion.

Reflecting on his role as CEO, Bankman-Fried accepted responsibility for the FTX’s troubles, yet maintained hope that customers would eventually recover their funds. He further criticized the federal bankruptcy court for not resolving the recovery promptly to help customers.

A Second Chance for SBF?

This isn’t a defense of SBF’s actions. He deserves his punishment, and 25 years is a substantial sentence that will undoubtedly leave a permanent mark on his life.  However, focusing solely on retribution leaves no chance for a more comprehensive solution with long-lasting effects.  By addressing the systemic issues that allowed this fraud to happen in the crypto industry, further losses can be prevented.

The industry is at a crossroads. On the one hand, the crypto community leaders might be cautioned against misusing customer funds and embezzlement due to Bankman-Fried’s sentencing. On the other hand, they could be motivated to steal from their customers in a more obscure way

The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.

 

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