SBF sentenced to 25 years in prison

March 28, 2024 10:07 AM

BBC article. He is planning to appeal. Failing that, I believe he should (under US federal-crime sentencing guidelines) have to serve at least 21 years of the 25.

Molly "web 3 is going great!" White on what this means for crypto (tl;dr: not nearly enough).

Previously. Previouslier.

posted by humbug (58 comments total)

(He should appeal - everyone should, we have a right to). The first link goes to a pidgin version of the article, which briefly broke my brain, lol
posted by tiny frying pan at 10:12 AM on March 28 [5 favorites]

Ack, apologies! Here's the BBC's live coverage. Mods, could I get a URL replacement please?
posted by humbug at 10:24 AM on March 28 [1 favorite]

Good.
posted by Frayed Knot at 10:26 AM on March 28 [2 favorites]

FTX would still not have enough money to repay the investors whose money they stole and wasted on various investment schemes. They might have enough resources to return the bitcoin of various depositors, although even that’s unclear to me. An awful lot of FTX’s balances were various garbage coins and their own worthless tokens.
posted by GenjiandProust at 10:30 AM on March 28 [8 favorites]

I'd be curious to know what there is to appeal. His testimony damned him as much as the rest of the evidence.

Does 25 years provide enough of a deterrent effect to other scammers? That's a larger question. Cryptoscrip is still bought and sold with real money, and remains easy to steal and use to launder money by other wealthy criminals. It is all still effectively unregulated.

None of that seems to have changed, even if it is good that this one criminal faces justice today.
posted by They sucked his brains out! at 10:30 AM on March 28 [1 favorite]

There's usually something to appeal, whether it's facts brought up at trial or whether certain things should have even been brought up at trial or even quibbling about the amount of fines imposed. Regardless, everyone gets an appeal even if there's no merit to it once the briefs get flowing.
posted by tiny frying pan at 10:33 AM on March 28 [1 favorite]

FTX might have enough Bitcoin in their ledgers that, at newly inflated prices, might actually be enough to make the investor base whole.

Doubtful.

Last year, Ray testified to Congress that FTX’s collapse was “really old-fashioned embezzlement. This is just taking money from customers and using it for your own purposes.” Justice department prosecutors echoed his statements in the immediate aftermath of Bankman-Fried’s conviction.

At trial, the court heard from an accounting expert who said that $11.3bn in customer funds were supposed to be held at Alameda Research, FTX’s hedge fund arm. But only $2.3bn could be located. The rest had gone toward investments, political contributions, charity foundations and real estate purchases. FTX, remarkably, had left almost no records of transactions.

[...]

Last week, Ray pushed contentions about visibility aside. The CEO said he could not return the crypto assets because they don’t exist. “A jury has concluded beyond a reasonable doubt that Mr Bankman-Fried stole them and converted them into other things,” he wrote in a court filing.

If there were any crypto assets left, I'm sure SBF would've raised some sort of a Trump-style line-went-up-therefore-nobody-was-harmed-ends-justifies-the-means BS defense.
posted by RonButNotStupid at 10:34 AM on March 28 [4 favorites]

If there were any crypto assets left, I'm sure SBF would've raised some sort of a Trump-style line-went-up-therefore-nobody-was-harmed-ends-justifies-the-means BS defense.

They more or less tried this in the 100-page sentencing argument, along with a bunch of character references from effective altruists and, weirdly, an ex-cop charged with child sexual abuse.
posted by GenjiandProust at 10:42 AM on March 28 [6 favorites]

Depositors are going to be reimbursed based on 2022 valuations of their holdings. They're going to be reimbursed in cash. Doing some napkin math.

One of their larger liquid holdings, Solana, has gone from let's say $20 in Dec 2022 to about $180 per coin today.

So if they refunded Solana depositors in Solana, they would be getting 1 Solana for every 9 they had deposited.

So if we ignore USD entirely and tried to stay only in the crypto ecosystem, depositors are nowhere close to being made whole. They're getting 10% of their deposits back.
posted by muddgirl at 10:51 AM on March 28 [4 favorites]

Does 25 years provide enough of a deterrent effect to other scammers?

There are a whole bunch of ways to scam and I'm sure a lot of the crypto-bros are looking at what SBF did, thinking "We don't do that" (which is probably true. They do a different scammy thing), and going about their business.
posted by It's Never Lurgi at 10:53 AM on March 28 [1 favorite]

Does 25 years provide enough of a deterrent effect to other scammers?

I'm glad he will be punished, but prison length is not a significant deterrent.

"Research shows clearly that the chance of being caught is a vastly more effective deterrent than even draconian punishment. Sending an individual convicted of a crime to prison isn’t a very effective way to deter crime. Prisons are good for punishing criminals and keeping them off the street, but prison sentences (particularly long sentences) are unlikely to deter future crime. ... Increasing the severity of punishment does little to deter crime."

Courtesy of that bastion of woke doctrine and far-left bias, the U.S. Department of Justice.
posted by Mr.Know-it-some at 10:53 AM on March 28 [24 favorites]

LOL at the idea of any sentence being a deterrent for any crime
posted by tiny frying pan at 10:55 AM on March 28 [5 favorites]

I don't believe in jail time as a deterrent. I would be a total proponent for something like house arrest to prevent white collar criminals from committing more crimes. But SBF has already demonstrated that he will continue to commit crimes under house arrest.
posted by muddgirl at 11:03 AM on March 28 [7 favorites]

Dude, the link takes me to 'BBC News - Pidgin'. Here's how it reads:

Sam Bankman-Fried, di former billionaire crypto boss don chop 25 years imprisonment sake of di fraud and money laundering wey im dey involved in.

Bankman-Fried wey dey convicted since last year appear for court for New York wia dem sentence am to imprisonment for di crimes wey im commit.

Authorities arrest Bankman-Fried last year afta im firm, FTX, go bankrupt.

FTX get around 1.2 million registered users wey bin dey use di exchange to buy cryptocurrency tokens like Bitcoin and thousands more.

From big traders to regular crypto fans, all of dem don dey wonder if dem go ever get di savings wey dey trapped for FTX digital wallet.

I think I need more of this in my life.
posted by Phreesh at 11:05 AM on March 28 [16 favorites]

Considering that prosecutors were saying they wanted him to spend enough time in prison to outlast his "working years" this sentence is a joke. Madoff was 70 in 2008.
posted by shenkerism at 11:08 AM on March 28 [3 favorites]

Every time i hear about the American justice system it gives me the ick. Sure, was this guy a moral void of a human, who embezzled huge amounts? Yeah. Does he deserve whatever is about to happen to him in jail? Probably not. Are there better penal systems that rehabilitate and educate? Absolutely, and the United States knows that, but “retributive justice system that includes sexual violence” is apparently a vote winner for some people.
posted by The River Ivel at 11:18 AM on March 28 [8 favorites]

Huh? I assume he will go to regular old white collar prison, which is really quite nice. Not that I condone prison sexual assault, it's a travesty that should never occur. But he should be safe from violence, they won't lock him up with violent offenders.
posted by tiny frying pan at 11:28 AM on March 28 [5 favorites]

According to the article I read in the Seattle Times
Kaplan said he would advise the Federal Bureau of Prisons to send Bankman-Fried to a medium-security prison near San Francisco because his notoriety, his association with vast wealth, his autism and social awkwardness are likely to make him especially vulnerable at a high-security facility.
posted by tracknode at 11:31 AM on March 28 [2 favorites]

This is your regularly scheduled "no prison in the United States is good, they are all inherently a violation of dignity" briefing.
posted by corb at 11:32 AM on March 28 [28 favorites]

As much as I despise Bank-Fried and his ilk, I don't think prison is a solution. It won't rehabilitate him, or do anything about the systems that let him scam people.

It's just retribution against this one, admittedly obnoxious guy. I don't find much to celebrate in that.
posted by The Manwich Horror at 11:32 AM on March 28 [5 favorites]

Nobody here is cheering for Bankman-Fried to be abused in prison. But on the same note, he's also someone who cannot be rehabilitated, because that requires contrition, and the man has shown little of that.
posted by NoxAeternum at 11:34 AM on March 28 [21 favorites]

This is your regularly scheduled "no prison in the United States is good, they are all inherently a violation of dignity" briefing.

I disagree. Many federal prisons aren't awful. I have no special knowledge of where he's going.
posted by tiny frying pan at 11:35 AM on March 28

People say crypto is a scam, but so far I've broken even on it without even buying any.
posted by The Card Cheat at 11:35 AM on March 28 [16 favorites]

cannot be rehabilitated, because that requires contrition

He's had every financial, social, and educational advantage, and he's 32, so I agree that the chance of him developing self-knowledge and regret is low. But contrition at sentencing is not necessary for rehabilitation: I'm thinking of the more typical criminals - younger, disadvantaged - who do not express any contrition at sentencing and do mature, in various senses, while serving their sentences.
posted by Mr.Know-it-some at 11:44 AM on March 28 [1 favorite]

Absolutely. You are not legally required to say you're sorry or take any responsibility at sentencing.
posted by tiny frying pan at 11:48 AM on March 28 [2 favorites]

Many federal prisons aren't awful.

By what standard and from what information are you saying this?
posted by corb at 11:59 AM on March 28 [6 favorites]

From my experience of working with the courts, and my reading of experiences of different facilities over the years, I suppose. "By what standard" I'm not sure how to answer, from the standard of my state's prisons which are terrible, I guess? If your opinion is that all prisons are inherently a violation of dignity than we will still disagree, so I don't think we need to drill down on my opinions.
posted by tiny frying pan at 12:03 PM on March 28 [1 favorite]

Molly White's newsletter has a bunch of information about the sentencing memoranda from the two sides, including some discussion about the claims of "making people whole." Like all of White's work, it's well worth reading (you call also get it as a podcast Molly White's Citation Needed).
posted by GenjiandProust at 12:19 PM on March 28 [2 favorites]

How much is a prison sentence for white collar crimes simply a compromise for not being able to track down all the ill-gotten gains that someone has squirreled away in places that are difficult to pierce and for not being willing or able to financially surveil the criminal, their family and friends, and any organization that has any connection to anyone for decades to come?

A staggeringly huge sum of cash just simply disappeared from FTX because the corporation deliberately didn't keep records of financial transactions. How likely is it that SBF has money stashed in places where it won't be found? How likely is it that he'll still walk away with some direct or indirect profit for his criminal fraud?

We've all read reports about how legally difficult it is to trace the assets of people like Trump or Russian oligarchs. And in the case of the latter there's even been some pushback against legislative attempts to increase transparency because it turns out extremely wealthy people in general don't want to be transparent with their finances. Prison might not be the best alternative, but maybe it's the compromise between investigators having more invasive means of tracking the flow of money and letting convicted fraudsters get away with it.
posted by RonButNotStupid at 12:28 PM on March 28 [2 favorites]

If you're running a multibillion-dollar crypto fraud and you don't send at least a couple million into a cold wallet whose address and keys are located solely in your memory as an insurance policy, that's a skill issue.
posted by 0xFCAF at 12:38 PM on March 28 [13 favorites]

"I don't think prison is a solution. It won't rehabilitate him, or do anything about the systems that let him scam people."

Well, for at least two decades, he's not gonna be able to spin up another scam-- so there's that.
posted by Static Vagabond at 1:02 PM on March 28 [11 favorites]

My wife works as a fraud analyst for a bank. She absolutely hates, hates, hates those bitcoin atms that have sprung up in so many places.
The only thing they seem to be used for is to scam old people out of their money.
posted by Dirk at 1:16 PM on March 28 [8 favorites]

I’m sorry, are we going soft on white-collar crime now?

Elizabeth Holmes is serving 11 years in part because after Theranos she was trying to raise money for another grift. Sam Bankman-Fried violated bail and was sent back to jail because before his trial he was trying to intimidate witnesses.

Having these two people serve long jail terms is for the public good, because it keeps them from grifting again. The punishment is just a happy side effect.
posted by fuzzy.little.sock at 2:48 PM on March 28 [10 favorites]

To follow up on my own comment, here's a quote from the WaPo story:

The chance that Bankman-Fried could commit other crimes weighed into the sentencing decision [...]

“There is a risk this man will be in a position to do something very bad in the future and it’s not a trivial risk,” the judge said. “Not a trivial risk at all.”

That's why the 25-year sentence is appropriate.
posted by fuzzy.little.sock at 3:21 PM on March 28 [2 favorites]

That's why the 25-year sentence is appropriate.

To be fair, the actual calculation based on all the sentencing factors would be 110 years, and the prosecutors asked for something like 50, so he has already gotten off lightly.
posted by GenjiandProust at 4:38 PM on March 28 [4 favorites]

The odds he goes to a prison that even has razor wire are slim
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 5:36 PM on March 28

why are ppl defending this criminal my god
posted by They sucked his brains out! at 6:13 PM on March 28

i am categorically opposed to creating a social category "criminal", consisting of people to be denied basic rights and deprived of dignity in prison, and simultaneously ok with society dealing harshly with people who are actual major large-scale threats to all of society; the average violent offender is a much smaller-scale threat than an uber-rich con artist who can noticeably dent the large-scale social fabric with their bullshit. the question "how will we deal with rapists when we hopefully abolish prison?" is urgent and will require creativity and wisdom and resolve. "how do we deal with large-scale white-collar cartoon villains?" is more obvious and involves something like exempting that person from most property rights, the protections of contracts other than basic labour protections, confiscating all income unspent at the end of each month, generally making him live life on the sharp end of capitalism by legal force as long as that system persists, etc. but in any event, a person like SBF is more like a war criminal than a normal criminal, and just as it's a travesty that crimes against individuals are often punished more harshly than war crimes, it's sort of weird to make SBF a poster boy for the terribleness of the "justice" system, since a just treatment of SBF would maybe be worse, for someone like him, than what he's getting.
posted by busted_crayons at 6:18 PM on March 28 [12 favorites]

why are ppl defending this criminal my god

No one is defending him but some of us are prison abolitionists.
posted by corb at 7:30 PM on March 28 [12 favorites]

I apologize if this is toxic masculinity, but I genuinely believe that there are a large number of people like SBF that are just one biblical ass-kicking away from being a decent human being. I grew up in violence and do not think it is something ever appropriate for children, but there are some young adults - virtually all of them male - that really would become wonderful human beings if someone could just finally kick the shit out of them for once. The lack of any experience being helpless in the face of incredible, terrifying violence and the empathy for others in similar situations firsthand experience can promote is the main thing holding them back.

Honestly not sure on reread if that’s toxic masculinity or simply profound spiritual exhaustion paired with a desire to just get on with fixing a large category of people-shaped problems directly, quickly, cheaply, and with the least aggregate suffering possible.

Anyway, everything I’ve read or seen of SBF leads me to believe that while he shares many qualities with such people, he is far enough gone that actual rehabilitation is simply not a realistic possibility using any civilized or even half-civilized means. I am generally for prison abolition but I honestly have no idea what to do with people like him - there’s no single factor holding him back from empathy, you’re talking a ground-up build from scratch that isn’t going to work without intense personal motivation and, particularly when dealing with my fellow spectrum-disordered nerds, a massive amount of good-faith participation on their end. I don’t see a real answer, and I think that’s why we’re having so much collective difficulty agreeing on this one.
posted by Ryvar at 9:33 PM on March 28

I don’t think that’s anything like reliable, Ryvar. Too many people who get the one asskicking instead decide to arrange their lives so no one can ever do that again, or indeed to get revenge.
posted by clew at 10:34 PM on March 28 [7 favorites]

Solana is the poster child of an L1 which the SEC should go after, under old school unregistered securities reasoning. As I understand it..

Solana has a centralized powerful leader node (database), with other powerless nodes tracking the identical database changes. Solana crashes when their leader crashes, because it's basically just one beefy machine. Solana does not even merkilize their state like other chains, which makes them fater, because they simply do not care about lite clients, etc.

It's not "decentralized" in any sense, except that by using wallets and having a transperent database, regulators have thus far treated it like a distributed system they might've trouble completely shutting down.

If the SEC prosicuded Solan quickly, and maybe even shut it down, then maybe they could drop the price back below $20 before the settlement payouts, so then those investors would be being paid back above market rate. lol
posted by jeffburdges at 12:30 AM on March 29 [1 favorite]

Ryvar, males often kill one another in primitive societies. We've supporessed it well but afaik this happened through rather extreme social repression and 12 dimensional chess, like imho duals formalized this violence for centuries so then society could swat it down.

We'd be playing with fire if we rolled that back slightly, but maybe that'll happen anyways, due to planetary boundaries like climate.

> The lack of any experience being helpless in the face of incredible, terrifying violence

At a societal level, I've often opined that the south winds up being more tollerable than the west coast, thanks to being the only region in the US which really lost a war on its home soil. It's not exactly true though since the north westerners behave sanely by American standards too. I've of course met many lovely people on the west coast, but someone every time I go I'll meet a random local or two who're just the biggest assholes ever. It's small sample size & bad luck mostly.

I think "only child syndrome" should be the well studdied flavor of your conjecture. Although even brain differences exist, 'since the 1970s .. the majority of only child studies have debunked the existence of a “syndrome.”'
posted by jeffburdges at 1:00 AM on March 29 [1 favorite]

Thanks for the good replies both, clew and jeffburdges. As my caveats suggested this isn’t a super deeply-held opinion of mine. More an observation while growing up deeply fundie-Republican that there were a handful of smarmy, smugmeister little shits that improved radically after their ego wrote the first check their ass couldn’t cash. I appreciate the solid counterarguments to what is probably confirmation bias on my end.
posted by Ryvar at 4:19 AM on March 29 [1 favorite]

This is your regularly scheduled "no prison in the United States is good, they are all inherently a violation of dignity" briefing.

"All prisons are bad therefore every prison is the same" is a bad argument on the face of it. I'm pretty sure that SBF is going to have a nicer time than being sent to the Kolyma, prison abolitionism or not.
posted by Pyrogenesis at 4:32 AM on March 29

I don't believe anyone has said all prisons are the same. Only that they are all bad. Certainly the focus should be on those suffering in the worst prisons, but that doesn't make the others good. Just like Bankman-Fried not being sympathetic or as morally worthy as a drug dealer or bank robber doesn't mean it is okay for him to be abused.

Prison abolitionism doesn't mean the wrong people are in prison, or that they aren't pleasant enough, after all. It isn't a call for reform.
posted by The Manwich Horror at 6:47 AM on March 29 [5 favorites]

I understand that. I'm a prison abolitionist (and defund the police etc). It is just very clueless to go about talking about prison reform under some nebulous notion of "dignity" for an almost never punished white collar crime while black people with drug "crimes" get the worst punishments and people like SBF get a light prison "near their family". It reeks of liberal tone policing which cares more about what things sound like than what they actually are.
posted by Pyrogenesis at 7:38 AM on March 29 [3 favorites]

It reeks of liberal tone policing which cares more about what things sound like than what they actually are.

The liberal tone policing seems like a veneer for light racism. If this particular individual wasn't a white, straight and formerly rich man, I sincerely doubt there would be as much strident calling for minimum security incarceration, appeals, prison abolishment, etc.
posted by They sucked his brains out! at 10:15 AM on March 29 [2 favorites]

Just like Bankman-Fried not being sympathetic or as morally worthy as a drug dealer or bank robber doesn't mean it is okay for him to be abused.

i do consider myself a prison abolitionist, but my position is slightly different from this, namely that moral worth is not really the issue here; magnitude of power and threat is the issue. i don't necessarily object to SBF being abused, if that's actually practically useful, I just don't think it should happen in a prison. in practice, i'd prefer he not be abused, but just for the same reason i think that revolutionary violence, even though justified in principle, is probably undesirable in practice because it rarely affects only, or even primarily, its legitimate targets. whereas i do object in principle to abuse of people who cause more human-scale harm, even extremely heinous, since i'm sure it achieves nothing, and i'm even more sure the abuses of the prison system affect many people who haven't caused any unusual amount of harm at all. as i said, SBF is a weird poster boy for prison abolition.
posted by busted_crayons at 10:29 AM on March 29

all in all, "abolish prisons but also guillotine billionaires" is an intuitively sympathetic enough, and probably common enough, seemingly incoherent position that it ought to be hashed out in some detail, and i give zero fucks about SBF except as a vehicle for hammering out a version of that position that's coherent and defensible, or convincing myself it's impossible.
posted by busted_crayons at 10:33 AM on March 29 [5 favorites]

The liberal tone policing seems like a veneer for light racism. If this particular individual wasn't a white, straight and formerly rich man, I sincerely doubt there would be as much strident calling for minimum security incarceration, appeals, prison abolishment, etc.

It seems a whole lot more like people in an environment where arguments against incarceration on the basis of racism and inequality carry a lot of weight wrangling with whether they can maintain a principled blanket opposition to incarceration in a case where those arguments don’t apply.
posted by atoxyl at 11:37 AM on March 29 [5 favorites]

If this particular individual wasn't a white, straight and formerly rich man, I sincerely doubt there would be as much strident calling for minimum security incarceration, appeals, prison abolishment, etc.

I'm dirt poor and not straight. I think guys like Bankman-Fried are repugnant, even when they stay within the limits of what passes for law these days.

But I think my visceral distaste for the man makes it more important to stick to my principles. If we had to keep some prisoners locked up, Bankman-Fried would be very close to the bottom of my list of people to release. What he did was far worse than even many violent crimes. Pulling a gun during a robbery or beating someone down in a fight is much less morally depraved than building a cult and defrauding people.

But I don't see any room for compromise with the carceral state. If you think that makes me a strident racist, or homophobe, or bootlicker, I'll just have to live with that assessment.
posted by The Manwich Horror at 12:02 PM on March 29 [4 favorites]

Michael Lewis said that jail didn't scare him; being cut off from internet access did. Does anyone know what the rules will be, either for minimum security federal prisons in general or for him in particular? In the fall his lawyer complained about bad wifi, but that was related to assisting in his own defense.
posted by Mr.Know-it-some at 1:21 PM on March 29

It is just very clueless to go about talking about prison reform under some nebulous notion of "dignity" for an almost never punished white collar crime while black people with drug "crimes" get the worst punishments and people like SBF get a light prison "near their family"

I am a public defender but go on, explain to me more about what my clients are like and why I shouldn't oppose the carceral prison system in its totality. Maybe I've been hit on the head since I got home from work.
posted by corb at 2:45 PM on March 29 [6 favorites]

But in *non* bitter response, the answer is: anyone that you accept "needs" to be incarcerated will be used to justify the carceral system that will absolutely be used to incarcerate the impoverished black and brown people that the prison system is mostly used against. Celebrating the one time a rich man got locked up might seem fun, but for many prison abolitionists, including myself, it acts as a legitimating factor for people to say "See, you DO like prisons after all! They just need to be reformed, not torn down at their roots!" And they absolutely do need to be torn down at their roots.

I officially promise, however, to be in every single prison thread I read on metafilter advocating for them to be torn down at their roots, no matter who the person is being incarcerated in them. You don't have to worry about that.
posted by corb at 2:50 PM on March 29 [12 favorites]

Here's the thing: I am opposed to the carceral state and I am certain that prison is not the correct solution for people like Bankman-Fried.

However?

Until we start ending the carceral state for poor minority people getting fuck you long sentences for petit crime then Bankman-Fried can rot in a cell.

We start dismantling the carceral state with the Black people serving hard time for marijuana possession, not with rich white scumbags.

And echoing what others have said the only real deterrence to shit like this is consistent enforcement and much higher odds for white collar criminals to be caught and penalized. I'd also add that we should start imposing the corporate death penalty casually and frequently. FTX shouldn't exist. Any corporation that is found to be operating at a certain, low, level of corruption and malfeasance should have its total eradication and breakup be a routine component of the process. Don't let the rich fuckers keep their toys when we catch them, and put a LOT more money into catching them.

I flat out guarantee you that Bankman-Fried is small fry compared to what's routine on Wall Street. Spend some War on Drugs level money targeting the financial sector in general and it'd pay for itself and more in fines and penalties.
posted by sotonohito at 6:31 AM on March 30 [7 favorites]

I flat out guarantee you that Bankman-Fried is small fry compared to what's routine on Wall Street. Spend some War on Drugs level money targeting the financial sector in general and it'd pay for itself and more in fines and penalties.

I dunno; $8-10 Billion is an accomplishment, even in a very corrupt field.
posted by GenjiandProust at 2:42 PM on March 30 [5 favorites]

Prison-tech company bribed jails to ban in-person visits
posted by jeffburdges at 10:36 AM on April 2 [2 favorites]