A crypto saga that started off in late 2022 came to its final chapter on March 28, 2024. Sam Bankman-Fried (SBF), was sentenced to 25 years in prison, a big discount on prosecutors’ recent proposal. While the case appears to be settled, the next steps might not be in everyone’s best interest.
SBF got hit with a 25 year sentence and is forced to forfeit $11 billion for restitution, according to a court ruling – ending the saga of FTX’s former leader.
SBF is Headed to Jail
SBF pleaded guilty in November last year to seven counts of fraud and conspiracy. He initially faced 100 years of sentence, but his defense team suggested a range of 5.5 to 6.5 years. Despite this effort, earlier this month prosecutors proposed a prison sentence of 40 to 50 years for the disgraced crypto figure.
Some efforts eventually paid off in today’s court ruling. Contrary to Sam Bankman-Fried’s words of apology, attorney assistant Nicolas Roos emphasized the need for a prison sentence of at least 40 years so that SBF does not have the opportunity to relaunch FTX or an exchange.
Still, US District Court Judge Lewis Kaplan sentenced SBF to 25 years in prison for multi-billion fraud. According to Kaplan, this is a fair sentence. But it’s not the case’s ending since some suggest the sentence could be reduced.
Crypto lawyer James Murphy, best known as MetaLawMan, said in an X post today that SBF could appeal the recent conviction and sentence. He suggested that people convicted under federal law can be released from prison early but on average must serve 85% of the sentence. In SBF’s case, it could be around 21 years and 3 months.
The potential appeal had been previously brought up by SBF’s lawyer a month ago, The Guardian reported, and was reiterated during the Thursday court.
Other individuals associated with FTX and Alameda Research, including Caroline Ellison, Nishad Singh, Gary Wang, and Ryan Salame, also pleaded guilty and accepted the deals. Salame, the former co-CEO of FTX Digital Markets, was the only who did not testify at SBF’s month-long trial. However, he may be the next person to face judgment in May.
Faded Hope for FTX victims
Judge Kaplan rejected defense arguments on repayment. At the sentencing hearing’s outset, Judge Kaplan firmly rejected the defense’s claims regarding potential customer repayment, which leaves anyone who got nailed in the FTX saga in a lurch.
The judge dismissed their arguments on both legal and factual grounds. In particular, he criticized the suggestion that FTX customers and creditors would be fully reimbursed, calling it misleading. He also pointed out that the defense was mistakenly equating losses with the total USD trading volume in the FTX bankruptcy case.
According to Judge Kaplan, FTX had committed a crime by misappropriating customer funds, and had no right to use these funds for risky investments by its sister company, Alameda Research, or any other purpose.
According to a court hearing in Delaware in January, FTX is expected to refund customers in full. The exchange’s lawyer also added that it recovered $7 billion and reached agreements with the US regulators to prioritize customer repayment.
In a bid to collect more funds for customer refunding plans, the bankruptcy entity taking over FTX has sought to liquidate many of the exchange’s assets and investments.
Last week, FTX secured an agreement to transfer most of its shares in Anthropic company to get $884 million. Anthropic was among the exchange’s investments in 2021 and is also the most valuable investment.
FTX reportedly invested $500 million in the AI, equivalent to 8% of shares. These shares have reached a valuation of up to $1 billion.
FTX’s native token, FTT, is currently trading at around $1.98, down 4% in the last 24 hours, per CoinGecko’s data. The token hasn’t shown much reaction to SBF’s sentencing.
