SBF, see you in 25 years.

Written by: jk, Odaily Planet Daily

Youth in Fashion and Fury

In San Francisco in 2021, every visitor to this West Coast city would find FTX's massive advertisements everywhere in the city center, featuring Sam Bankman-Fried and his iconic hairstyle. "Who is this guy with the crazy hair?" tourists would often ask. "Oh, that's SBF," locals would proudly tell them, "a kid from the Bay Area, now the CEO of the best exchange. Do you know about Bitcoin?"

Image source: CNBC

At that time, FTX was at the forefront in the U.S., riding the wave of the crypto bull market, which propelled this derivatives-based American exchange to secure its position as the second-largest exchange in the world, with a staggering valuation of $32 billion, roughly equivalent to El Salvador's (yes, the country known for Bitcoin) annual GDP. All of this was the result of SBF and his team's efforts over five years. SBF had become the "Poster Boy" of the industry, hailed as the king of crypto, celebrated for his "effective altruism," while simultaneously making a fortune on FTX using high leverage. This is what a bull market looks like.

If you adjust your news search to 2021, you will find that his image was starkly different from that of the convicted man today. At that time, SBF was no longer content to be a successful figure in the crypto world; he was trying to fashion himself into a new star that bridged politics and business. He became a regular in Congress and Washington, donating $5.2 million to Biden's presidential campaign, ranking second among donors; he openly declared his willingness to support high tax rates for high-net-worth individuals. Many leading media outlets, both inside and outside the industry, took pride in being able to interview SBF.

And at that time, it had only been seven years since he graduated from MIT.

What followed is history familiar to readers.

In 2022, Coindesk published information about Alameda Research's balance sheet, and market confidence began to waver. A tweet from CZ officially triggered a sell-off of FTT, and despite SBF's repeated assurances on Twitter that funds were safe, FTX inevitably faced a bank run. FTT lost over 80% of its value, and SBF overnight transformed from a young, famous CEO into "one of the biggest financial fraudsters in American history."

On November 11, 2022, Alameda declared bankruptcy, and SBF announced his resignation on the same day.

A year later, the jury found SBF guilty on all seven counts against him, facing a wave of betrayal.

Day of Judgment

On March 28, U.S. local time, the judge sentenced Sam Bankman-Fried to 25 years in prison for fraud and ordered him to pay $11 billion in fines. It is reported that this sentencing is less than the 40 to 50 years that federal prosecutors hoped for, but far exceeds the five to six and a half years suggested by his lawyers.

Judge Kaplan, who presided over the case, stated that he had never heard SBF express any remorse for the serious crimes he committed. He said that in his 30 years as a federal judge, he had "never seen" a performance like SBF's testimony. Odaily Planet Daily previously reported that SBF said "I don't know" hundreds of times during his testimony, evading several key questions, and was left speechless when questioned by the prosecution. For the jury, this was tantamount to an admission of certain factual issues.

Before announcing SBF's 25-year prison sentence, Judge Kaplan expressed concerns about the risk that "this person may do very bad things in the future (after being released), and that is not a trivial risk."

What SBF and his lawyers have been trying to do is to portray SBF as a nerdy figure. This was not only the strategy during previous court hearings but continued up to the day of the trial. SBF's lawyer, Marc Mukasey, while requesting leniency from Kaplan, also worked to create a harmless image, suggesting that FTX was a mistake made by this nerdy scientist. The lawyer stated, "Sam is not a ruthless financial serial killer who goes out to harm people every morning." Instead, "he is an awkward math nerd" with "an unwavering work ethic." He argued that SBF should not be locked in "a four-by-four iron box."

The lawyer noted that based on SBF's diary, he "does not feel joy or happiness."

Prosecutor Roos stated that the collapse of FTX at the end of 2022 was not due to a "liquidity crisis or mismanagement." The prosecutor said, "That was theft of billions of dollars from global customers."

Final Confession

On the day of the trial, SBF had an opportunity to speak for himself. At this moment, speaking had become a mere embellishment after the outcome was largely determined; with the lawyers' arguments concluded and the judge having set the tone, there was little SBF could do. Therefore, he spent about ten minutes speaking in English that was almost entirely devoid of syntax, allowing us a glimpse into the mental state of this once-prominent figure after the dust had settled.

SBF said, "An important thing is my colleagues at FTX; I wasted what they built. They feel disappointed. For that, I am sorry. I am sorry for everything that happened at every stage… for the things I should have done and the things I said I shouldn't do… I really care about everything."

He chose to forgive the three individuals who were once core team members but now stood in the witness box against him. He said, "The whole industry has rebuilt itself according to Gary's model; many things he established have become industry standards. When Alameda was facing the risk of collapse, I received an anonymous message telling me how to solve the problem, and it was obviously from Nishad, who is famously humble. And Caroline, quite remarkable, mostly self-taught, sought my advice on employee evaluations. I read her evaluation of one person, and I learned a lot. They were all fully invested, and then I threw all of that away. I made a series of bad decisions. These decisions were not made out of selfishness."

He also said, "I was the CEO of FTX; I was its leader, which means I ultimately have to take responsibility. If you are the CEO, no matter how things go wrong, the responsibility lies with you. I am not the most important person in the end… My useful life may have already ended. I have given all that I can give."

Finally, as if using all his strength, he said, "There was once an opportunity for me to do what I once wanted to do for the world, and that is not what I am doing now. If people do their best for the world, I hope I can see their success, not just my own failure."

Bloomberg described the scene at that time: SBF, dressed in a brown prison jumpsuit, with hair longer than during the trial, stood with his hands crossed in front of him, showing no reaction as the judge read the verdict, his gaze lowered. His mother, Barbara Fried, looked out the window, while his father, Joe Bankman, cradled his face in his hands.

"We are heartbroken and will continue to fight for our son," SBF's parents said in a statement after the verdict.

According to prison consultant Christopher Zoukis, SBF is likely to be sent to a medium-security facility. Zoukis indicated that SBF could ultimately be placed at FCI Herlong, near the Nevada border, or at FCI Mendota, about 135 miles southeast of his parents' home in Palo Alto.

In federal criminal cases, although there is no possibility of parole, SBF has the opportunity to reduce his 25-year sentence through good behavior. Former federal prosecutor Mitchell Epner revealed that if SBF utilizes all available reductions, he might only need to serve a minimum of 12.5 years. Federal inmates can typically earn up to 54 days off their sentence each year for good behavior, which is about a 15% reduction. Since the implementation of the "First Step Act" prison reform legislation in 2018, non-violent federal inmates may have their sentences reduced by up to 50%. Additionally, special reasons, usually medical, also allow courts to reduce sentences.