FTX's Sam Bankman-Fried Should Serve 40 to 50 Years in Prison, Prosecutors Say

https://www.wsj.com/finance/currencies/ftxs-sam-bankman-fried-should-serve-40-to-50-years-in-prison-prosecutors-say-feb31d42

by tempsy • 2 years ago

48 124 2 years ago

wsj.com

webkike• 2 years ago

Can’t wait to be 75 and read the newspaper seeing he just got released

DSingularity• 2 years ago

He will get out much sooner.

dmoy2• 2 years ago

So if he's sentenced to 40 years in federal court ... (this is federal court, right? I forgot)

Fed doesn't do parole. Best you can get typically is time for good behavior for like 15% reduction in length.

But there's a good chance he doesn't get sentenced to 40 years, that's just what the prosecutor asks for. We dunno yet.

porkbeer• 2 years ago

You really think he will do the whole sentance? I will be shocked if he sees more than 5.

jcranmer2• 2 years ago

Federal prison sentences don't offer a lot of opportunities for early release--you get to shave of 54 days per year of served time, or in other words, he might be able to get out 7 years early were he sentenced for 50 years.

The only way he'll serve less than 5 years is if Trump is elected president and decides to pardon him because no one should go to prison merely for defrauding people out of billions of dollars.

Rebelgecko• 2 years ago

Do you think he'll get a sentence that short, or that one of the next two presidencies will pardon him?

COGlory• 2 years ago

I'm curious if anyone has any idea - how much money is actually unaccounted for? Michael Lewis's book makes it seem like the money existed, but was all over the place, and that by the time all was said and done, they were basically in the black. But that was assuming investments didn't ever grow - they still had to have lost money somehow.

smcl2• 2 years ago

Wasn’t the issue that the “money” that was left was actually in the form of largely worthless cryptocurrency investments, some of which were issued by FTX themselves.

8note• 2 years ago

Which seems kinda silly. People willingly traded their USD for garbage that wasn't worth anything, and put their money into accounts any reasonable person would think is worthless.

He was really just serving a market for people trying to put their money into valueless garbage

greedo2• 2 years ago

For a multitude of reasons, Lewis is an unreliable narrator...

infecto4• 2 years ago

Yes, leave only an accusation without supporting facts or ideas.

misnome• 2 years ago

My understanding is that the money is "back", but only because the Crypto holdings were frozen at the point of bankruptcy and the crypto prices have more than doubled since then.

So, account holders might get something approaching the dollar value of what they held two years ago, not what they "should" have got if they still held it today.

CodesInChaos• 2 years ago

Let's see if it goes like MtGox where it takes more than a decade to pay out the money.

drexlspivey• 2 years ago

The hole is $8bn (that's counting real assets no shit tokens) which is probably going to be covered completely by their 8% stake in Anthropic that FTX bought for $500m. The lawyer fees for the bankruptcy are $1.5m per day.

tempsy• 2 years ago

I believe customers will be made whole but in dollars at time of bankruptcy

so if you had 1 bitcoin on ftx then you’re only going to get $15k or whatever the price was then not $70k

gafferongames2• 2 years ago

Seem too lenient

Ekaros• 2 years ago

Yeah, like for stealing 11 million it would mean 14 to 18 day sentence... Which seems very very little for the amount.

amethyst• 2 years ago

Justice runs on a log scale, and the base is left for individual jurisdictions or judges to decide.

sublinear• 2 years ago

What about Caroline Ellison, Gary Wang, and Nishad Singh? This wasn't just Sam Bankman-Fried and the rest should be rounded up for racketeering. Their plea deals were only with the Southern District of New York.

TillE2• 2 years ago

They plead guilty, which would have been the smart thing for SBF to do even if there was no deal on the table. At least he'd have avoided annoying the judge with hours of blatantly dishonest testimony.

typon• 2 years ago

Why is it acceptable to let people go so lightly just for snitching? They commited similar crimes.

davidcbc• 2 years ago

So lightly as what? They haven't been sentenced yet

CydeWeys• 2 years ago

Because they collaborated with the prosecution. Without collaboration it's entirely possible that no one would've been found guilty.

andrewxdiamond• 2 years ago

It’s makes it harder for organizations like this to exist in the future. If you and your co-conspirators knew you were all getting the same sentence, no matter what, you’re not likely to snitch.

But if the option of plea deals is ever present, you’re more likely to get whistleblowers. Any single whistleblower make the whole thing tumble.

adventured• 2 years ago

It's hard to tell what deals were cut by the Feds to get Bankman-Fried. Sometimes people get a relative slap on the wrist and it's because they provided a bunch of ammunition the government needed for its case to get the top target/s.

deadbabe• 2 years ago

He will deserve every year of that sentence.

com2kid• 2 years ago

Question here: What is the purpose of a sentence this long?

I understand that for this type of crime the goal is deterrence rather than rehabilitation, but let's say we had a habit of locking up corrupt billionaires for 20 years instead of 50. I'd argue that the lost opportunity cost for people that wealthy (or really for anyone) that 20 years is as much a deterrent as 50 years, but at a lower cost to the tax payer.

jyap• 2 years ago

Don’t forget his Billionaire status came from fraudulent activities (taking other people’s money).

This isn’t punishing entrepreneurs.

throwaway744322• 2 years ago

20 years is as much a deterrent as 50 years, but at a lower cost to the tax payer.

The number of wealthy people getting those kinds of sentences is basically 0, so the cost to the taxpayer is a moot point.

anigbrowl• 2 years ago

but let's say we had a habit of locking up corrupt billionaires for 20 years

bigyikes• 2 years ago

It’s a good question that seems to hit the same chord as the death penalty argument.

I don’t hold this view, but I think the answer is: the goal is punishment, not deterrence, nor rehabilitation. People want “justice” which, in their view, can only be served via harsh punishment.

NegativeLatency• 2 years ago

Hard to square with the lack of consequences (for those responsible) for the 2009 financial crisis.

melling• 2 years ago

Can you be more specific about those responsible?

rhizome• 2 years ago

Jamie Dimon should be in prison right now, for one.

bitcharmer• 2 years ago

Are you trolling? You think it happened by accident?

CPLX• 2 years ago

Get them too

bparsons• 2 years ago

It speaks to how outrageous the fraud he committed was. It is a very high bar one must clear.

rvz3• 2 years ago

If anyone attempts to whistleblow on the fraud that the banks have allowed for years as shown in the FinCEN files, then you will find yourself in a prison cell for exposing it. [0]

[0] https://www.icij.org/investigations/fincen-files/fincen-file...

raffraffraff• 2 years ago

Came here to say exactly this. That financial crisis ruined countless lives. The dominos fell all around the world. Across the Atlantic in Ireland I knew of several suicides. Most of my friends were at the age where they had paired off, and got onto the property ladder with tiny, overpriced "starter homes". Why? For one, to get out of the rent trap. But mainly because they wanted to start a family. Most of my college buddies ended up sentenced to 15+ years of negative equity. People blamed them for making unsound investments, but they had already delayed having kids well into their late 30s, and had no choice. I know families with several teenage kids who never recovered financially. The big banks repackaged bullshit subprime mortgages into CDOs that the ratings agencies gave AAA+ ratings to.

Frankly, I think that the perpetrators didn't go to jail for the same reason that a huge number of Nazis avoided consequences after WWII: there were simply too many people complicit in it, but no chief architect. There was a simple choice: prosecute them all and lose the whole banking sector, or bail them out. So the government decided that the taxpayer would bail them out. The same tax players who lost homes and livelihoods. And they weren't just bailed out financially, the slate was scrubbed clean.

What Bankman Fried did was nothing in comparison. I believe should go to jail, but 50 years? That's probably more than first degree murder in most states.

dns_snek• 2 years ago

I agree, everyone involved in that should've suffered the same consequences, or worse, but the next best time to start handing out real punishment is right now.

trhway3• 2 years ago

Not trying to defend or anything (what I read in those news on SBF doesn't cause any sympathy for him in me), just wondering - as the crimes committed here were committed in the open over some prolonged time, why those crimes weren't stopped by the law enforcement several years/billions (and decades of prison term) before that pretty late point? Kind of like with Madoff or 2008 - everybody knows that the things aren't kosher (and the professionals and the related law enforcement even know most of the details of how bad the things really are), yet let it go until it crashes - basically it looks like the main crime in such cases is the failure/crash itself not the cheating/scamming/etc. before it.

JumpCrisscross8• 2 years ago

it looks like the main crime in such cases is the failure/crash itself not the cheating/scamming/etc. before it

The stealing caused the crash.

trhway3• 2 years ago

The question is why the stealing is allowed to go for that long and massive and pretty much in the open until it results in the crash.

epivosism• 2 years ago

Readers may be interested in this link, which is to all the SBF sentence-related markets on manifold.

Caveats: just like twitter follower counts, instagram like counts, hn upvotes, this is "play money", the mana amounts the traders bet here are numbers in a database, not real cash. Also the number of traders is fairly small.

The top markets have settled on these values:

  300 traders, The most likely time served is 20-30y

  270 traders, he'll be sentenced to 20y+, 86% 

  135 traders, he'll be sentenced to 50y+, 27%

https://manifold.markets/browse/sbf-trial-sentence?s=most-po...

huytersd• 2 years ago

That’s silly in my opinion. I didn’t see any of the actual big wigs go to prison for 2008 but Sam is an easy target with the dual effect of vilifying cryptocurrencies.

tomoyoirl• 2 years ago

Bigwigs have done many things, but most of them weren’t doing things like offering unregistered securities and lying about how they used customer funds for their own investments. Those are crimes in a way that other 2008-stuff generally wasn’t.

charonn0• 2 years ago

His crimes are closer to those of Bernie Madoff than, say, Jamie Dimon. Madoff was sentenced to 150 years.

viraptor4• 2 years ago

That one's silly too. Unless someone is so damaged they're not capable of ever not harming others, (think psychopathic murderers) what's the point of sentences that long? Anything past 15 years or so effectively destroys their existing lives anyway. I think that crosses from punishment to unnecessary cruelty and stuffing prisons.

s1artibartfast• 2 years ago

My understanding is that sbf's investors might even come out ahead. Sure that would be a consideration

bdjsiqoocwk• 2 years ago

Could you give us a name of one or two big wigs that in your opinion should've gotten 40-50 years in prison due to 2008?

stalfosknight• 2 years ago

All of them would be a good start.

pram• 2 years ago

Richard Fuld and Henry Paulson for sure. Kerry Killinger and Christopher Cox for the encouragement of the others.

mihaic• 2 years ago

Because others have not been properly punished that means he doesn't have to be punished as well? Not sure I get your logic.

kylecazar3• 2 years ago

2008 was caused by the confluence of irresponsible political AND financial decisions. Irresponsible and illegal aren't the same thing.

xeornet2• 2 years ago

Legal and right are also not the same thing. I hope laws changed as a result.

ShamelessC• 2 years ago

Based on how he was acting during trial, I assume he still thinks he's somehow getting out of this.

bhouston• 2 years ago

I am so confused by his weird persona.

Obviously he has to be smart, you don't make a multi-billion dollar company/fraud without being incredibly smart, but doesn't that generally mean an acceptance of reality?

He seems so disconnected from reality most of the time, like he is mentally ill almost.

highwayman47• 2 years ago

That’s his act, so he doesn’t have to serve a full sentence.

p1mrx• 2 years ago

"I reject your reality and substitute my own." I think you have to be smart to become truly nuts.

Waterluvian• 2 years ago

Obviously he has to be smart, you don't make a multi-billion dollar company/fraud without being incredibly smart

I think we want this to be true. We want a meritocracy based on intelligence. But I’m very skeptical it’s true.

I think he could be a total moron combined with some money, some connections, luck, and the lack of the things that hold many of us back such as self doubt, fear, morals and ethics, and obeyance to the law.

lancesells• 2 years ago

I think that he's just more criminally minded than most. This wasn't an overnight thing and he seemed to do quite a bit of press, lying through his teeth the whole time.

Also, he doesn't read books.

sidewndr463• 2 years ago

Based on the letter's they've sent his parents also think he is going to walk away from this

tptacek3• 2 years ago

This is predictable; he's been convicted of 2B1.1 crimes, which scale with monetary losses, which top out (in the tables) at, like, 500MM, and put you (by themselves) near the bottom of the sentencing table.

https://news.ycombinator.com/item?id=38123281

djao• 2 years ago

From the article:

The federal probation department separately recommended a 100-year sentence for Mr. Bankman-Fried, 32, effectively a life sentence. But prosecutors said in the filing that sending him to prison for the rest of his life was not warranted, despite the severity of his crime, because of his relative youth.

So it looks like the prosecutors are coming in below the sentencing guidelines.

1vuio0pswjnm73• 2 years ago

The Government's Sentencing Memorandum:

https://storage.courtlistener.com/recap/gov.uscourts.nysd.59...

Exhibits:

https://storage.courtlistener.com/recap/gov.uscourts.nysd.59...