Sam Bankman-Fried sentenced to 25 years in prison

Barbara Fried and Joseph Bankman, parents of FTX founder Sam Bankman-Fried, exit the Manhattan Federal Court today in New York.

Bankman-Fried’s parents, Joe Bankman and Barbara Fried, issued a statement after leaving the Manhattan courtroom Thursday, saying: “We are heartbroken and will continue to fight for our son.”

Several prominent voices in the crypto community took issue with Sam Bankman Fried’s 25-year sentence, given Ross Ulbricht was sentenced to life in prison in 2015.

Ulbricht created Silk Road — a website that let users anonymously buy and sell anything, including drugs and hacking tutorials. Transactions on the site took place using bitcoin, making it much harder to trace.

Bitcoin Magazine, a crypto publication with more than 3 million followers, posted on X shortly after SBF was sentenced on Thursday:

Roger Ver, an early bitcoin investor often referred to as “bitcoin Jesus,” posted on X Thursday morning ahead of Bankman-Fried’s sentencing trial that Ulbricht’s “‘crime’ was building a website where people could trade freely without government permission.” Since Bankman-Fried’s sentence was announced, his post has been shared by many popular crypto-linked accounts.

Damian Williams, the US attorney for the Southern District of New York, said in a statement that Bankman-Fried’s 25-year sentence “will prevent the defendant from ever again committing fraud and is an important message to others who might be tempted to engage in financial crimes that justice will be swift, and the consequences will be severe.”

In this courtroom sketch, Sam Bankman-Fried, second from right, stands while making a statement during his sentencing in Manhattan federal court, Thursday, March. 28, 2024, in New York. Crypto entrepreneur Bankman-Fried was sentenced Thursday to 25 years in prison for a massive fraud that unraveled with the collapse of FTX, once one of the world's most popular platforms for exchanging digital currency.

There is no possibility of parole in federal criminal cases, but Bankman-Fried can still shave time off his 25-year sentence with good behavior.

“SBF may serve as little as 12.5 years, if he gets all of the jailhouse credit available to him,” Mitchell Epner, a former federal prosecutor, told CNN.

Federal prisoners generally can earn up to 54 days of time credit a year for good behavior, which could result in an approximately 15% reduction.

Since 2018, however, nonviolent federal inmates can reduce their sentence by as much as 50% under prison reform legislation known as the First Step Act.

Epner says the First Step Act was billed as a civil rights measure, to help minority offenders who committed non-violent drug-trafficking offenses. 

“It has turned out to be an enormous boon for white-collar criminal defendants, who are already given much lower sentences … than drug-traffickers,” Epner added. 

There is also a provision that allows a court to reduce a person’s sentence for extraordinary and compelling reasons, which are often medical, according to Jordan Estes, a former federal prosecutor who is now a partner at Kramer Levin.

“Since the pandemic, courts have been more willing to grant early release under this provision if the defendant has served a substantial portion of his or her sentence,” Estes said.

Sam Bankman-Fried on March 30, 2023 after leaving the Manhattan federal court in New York City.

Judge Lewis Kaplan said he would recommend to the Bureau of Prisons that Bankman-Fried be placed in a medium-security facility or any lower-security facility the bureau finds appropriate.

Medium-security federal prisons have strengthened perimeters — often double fences with electronic detection systems — and mostly cell housing, according to the Bureau of Prisons. They also have a “wide variety of work and treatment programs.”

FTX founder Sam Bankman-Fried attends his sentencing hearing at Federal Court in New York City, U.S., March 28, 2024 in this courtroom sketch.

Judge Kaplan also ordered a forfeiture of $11.02 billion.

He ruled Bankman-Fried’s forfeited assets can be used to help fund the repayment of victims of the FTX collapse.

Correction: A previous version of this post misstated the forfeiture amount. It is $11.02 billion.

Judge Lewis Kaplan, just before announcing Bankman-Fried’s 25-year sentence, said there was a risk “that this man will be in a position to do something very bad in the future, and it’s not a trivial risk.”

Bankman-Fried acknowledged his mistakes and said he was sorry for what happened to customers but “never a word of remorse for the commission of terrible crimes,” Judge Kaplan said.

“He knew it was wrong,” he added.

Sam Bankman-Fried has been sentenced to 25 years in federal prison for defrauding customers and investors in crypto exchange FTX.

Sam Bankman-Fried after a court appearance on June 15, 2023 at Manhattan Federal Court in New York City.

Kaplan says many facts are not disputed, including that SBF had “an exceptionally privileged background.”

“He is extremely smart. And he suffers from autism,” Kaplan said, noting his understanding of the condition. Kaplan said SBF “is capable of huge accomplishments” while noting he has “a way of interacting with people that’s unusual and sometimes off-putting.”

Kaplan agreed with prosecutors’ claim that Bankman-Fried “wanted to be a hugely, hugely politically influential person in this country,” and that that propelled his financial crimes.

L to R: Bernard Madoff, Sam Bankman-Fried, Elizabeth Holmes.

Sam Bankman-Fried’s sentence of 25 years puts him at the high end for sentence length in prominent white-collar fraud cases. He faced over 100 years in prison under federal sentencing guidelines.

Ahead of him is Bernard Madoff, who was sentenced to 150 years behind bars for the $20 billion Ponzi scheme he led — the largest financial fraud in history. He died around 12 years into his sentence.

Theranos founder and CEO Elizabeth Holmes, meanwhile, is serving a much shorter sentence than Bankman-Fried. Holmes was convicted on four charges of defrauding investors while running the failed blood-testing startup Theranos. She faced a maximum of 20 years in prison but was sentenced to a little over 11 years. She began serving her sentence in May of last year.

Her counterpart, Ramesh “Sunny” Balwani, the former COO of Theranos and ex-boyfriend of Holmes, was sentenced to nearly 13 years in prison. He also faced up to 20 years.