While Sam Bankman-Fried faces a potential 100-some-odd years in prison, legal professionals agree he is unlikely to receive the maximum sentence.
A jury last week found the FTX founder guilty of seven charges, including wire fraud as well as conspiracy to commit fraud and conspiracy to commit money laundering.
Bankman-Fried “maintains his innocence and will continue to vigorously fight the charges against him,” his counsel, Mark Cohen, said in a Nov. 2 statement. He may ask the 2nd US Circuit Court of Appeals to review the jury’s decision.
His sentencing hearing before Judge Lewis Kaplan is scheduled for March 28.
“Sam Bankman-Fried’s sentence will be significant, but it won’t be life,” said Jack Sharman, a partner at law firm Lightfoot, Franklin & White.
Bankman-Fried faces up to 110 years in prison. But that figure represents the total of the maximum statutory sentences available — “which is not a yardstick,” Sharman told Blockworks.
The court will look at various factors under the federal sentencing guidelines, he added.
“Although the sentencing guidelines are no longer mandatory, most federal judges regard them as determinative,” Sharman said.
Kathryn Haun, founder and CEO of Haun Ventures and a member of Coinbase’s board of directors, said in a Friday X post that prison time under the guidelines is recommended by “combining a defendant’s prior criminal history with a total numerical offense level.”
Based on this, she added, Bankman-Fried is likely to serve “decades” in prison.
Outside of criminal history, factors considered include the number of victims, the amount of money lost and whether the person found guilty held a leadership role.
Bankman-Fried was the CEO of FTX until stepping down from the post in November 2022 — when the crypto exchange initiated bankruptcy proceedings. Lawyers representing FTX and affiliates said in a bankruptcy motion at the time there could be as many as one million creditors.
Bankman-Fried said he learned of Alameda Research’s liability to FTX — amounting to about $8 billion — in October 2022. The loss amount is likely to be “the subject of much dispute,” Sharman said.
Omar Ochoa, a founding attorney at the Omar Ochoa Law Firm, noted the large size of the fraud is likely to balance out Bankman-Fried’s lack of previous criminal activity.
“The seriousness of the crime, especially the fraud element and the size of the financial impact on victims, will result in a recommendation for a high sentence,” Ochoa told Blockworks. “But Bankman-Fried’s criminal history will be a very low score, which will help to keep the recommended sentence lower than the maximum.”
Ochoa pointed to the sentencing of Elizabeth Holmes, who was found guilty in January 2022 of defrauding investors of hundreds of millions of dollars. Holmes, who founded blood testing company Theranos, later that year received 11.25 years and was ordered to pay $452 million in restitution to fraud victims.
Sharman said Bankman-Fried might also suffer from the so-called “trial penalty” — a higher sentence given after a trial than what may have been offered as part of a plea deal.
Bankman-Fried may also be subject to an “obstruction” enhancement to the sentence for having testified, he added.
“If the court concludes that Bankman-Fried lied on the stand, it may more readily accept the government’s request for multiple enhancements,” Sharman explained.
Ochoa said the judge is likely to consider a sentence that sufficiently deters similar crimes in the future.
He added: “The fact that the case has received incredible media attention means that the judge will be sensitive to the message sent by the sentence provided.”
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