CoinDesk Managing Editor Nik De sits down with Yahoo Finance Live in-studio to discuss Bankman-Fried's sentencing, how much time the disgraced FTX co-founder will likely be made to serve in prison, and other details from Thursday's ruling.
"From the beginning, it felt like prosecutors were making this... almost a poster child of what they can bring to bear against alleged criminal activity in crypto, at least as far as running exchanges go," De comments.
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AKIKO FUJITA: FTX founder Sam Bankman-Fried sentenced to 25 years in prison for fraud tied to the collapse of the digital exchange, which was far less than what prosecutors had asked for. The judge also ordered SBF to forfeit $11 million in assets.
Joining us now is CoinDesk Managing Editor Nik De, who was in the courtroom today. Nick, let me just first get your reaction to the 25 years. 110 is the maximum he faced.
NIK DE: Yeah. No, definitely the statutory guidelines said 110 years. But every lawyer I've spoken to said that that's really just kind of a mechanical calculator based on the sheer extent of the crimes, which, in this case, were more than $550 million. 25 years was always kind of more, I think, a realistic goal just based on the idea that it's long enough that it should deter someone like Sam Bankman-Fried from doing anything like what he was accused of and convicted of. But at the same time, it's not so long that he's spending life in prison for what is a white collar crime.
JOSH LIPTON: And so he was sentenced to 25 years. But when you're talking to folks. Any sense of how much of that he actually is really going to serve?
NIK DE: So he has to serve about 85% of that. So he's spending more than 20 years in prison. He's going to appeal. His lawyer said he's going to appeal. He's been indicating he's going to appeal for this entire time.
But depending on how that appeal goes, and most likely the appeals court is going to say, we don't see a lot here for that, he will have to serve 85% before he can really try and get out for good behavior or whatever. And then even after that, he's going to have some time on supervised release according to the judge's order today.
AKIKO FUJITA: As Josh was saying earlier, you know, FTX collapse, the SVF. I mean, this represents a certain chapter it feels like in crypto. This is kind of the closure of that.
And yet there are other cases that are still pending there. What is the sentencing today mean for some of these other cases? I mean, you mentioned CC and Binance because the settlement there. That's going to be another issue.
NIK DE: Yeah, so definitely the FTX case has been years long in the making. CoinDesk we published that balance sheet in 2022. It's now 2024. And we're finally getting to a kind of resolution on that.
It might have, in effect, on some of the other criminal cases. But from the beginning, it felt like prosecutors were kind of making this almost a poster child of what they can bring to bear against alleged criminal activity in crypto, at least as far as running exchanges go. CC is very different. That was a plea deal.
So he can get at most 18 months, which is obviously it's far less. So because he agreed to a plea deal and Bankman-Fried's team did not ask for or seek one based on what they said at trial last year. It's going to be a very different case.
So I'm not sure how the CC case will really play out. Or if it's going to take any kind of cue from what happened today.
JOSH LIPTON: And, Nik, so Sam Bankman-Fried he was sentenced to 25 years. He was also ordered to forfeit $11 billion to Sam Bankman-Fried have $11 billion.
NIK DE: I would be very surprised. Yeah, some of that, I think, the forfeitures will come from assets that have already been kind of moving towards being seized by US. So there were private jets, for example. There was an order earlier this month by the judge allowing US prosecutors to seize and sell a private jet that was in the Bahamas.
Things. Like that will add up to I think maybe if not the whole 11 billion but certainly, a sizable chunk of that. What happens after that? I'm not sure.
The judge did say he's not going to order restitution or anything like that because there's no way he can pay it. So I think once they've sold off all the assets, they'll take a look and see where they're at.
AKIKO FUJITA: So, certainly going to be a lot more written about this in a historical context. You know, what this all means ultimately. Can you put some of this in context for us when you compare it to some of the other white collar crimes.
I mean, Bernie Madoff, obviously, being at the very top of it in terms of the sentencing that was doled out. But given that the scale of the crime and the punishment, how do you look at that.
NIK DE: It's complicated. Bernie Madoff was obviously in the actual activity was different. He was taking customers' funds.
He, at no point, intended to invest it or do whatever return it. He was just paying customers with other customers' funds. Bankman-Fried at least said he was trying to just invest in stuff and keep a company running.
And prosecutors showed successfully that whatever he was doing was not nearly as successful as he'd hoped it would be. And I think even today, we saw in the court, you know, Bankman-Fried took the stand said assets are their, customers will be made whole. We had a victim, an FTX creditor take the stand and say, even if we get back our funds, which is not a guarantee, they still suffered from the last year and a half of not having access to those funds.
I think the judge just took a look at all of that and said, OK, well, he has no remorse is what the judge said. He called him evasive. But despite all of that, I think the fact that, again, this is kind of a first of its kind for the crypto industry in terms of getting to this point.
And the fact that he is still in his 30s, he's probably not going to be able to do something like this again. I think that's where the judge kind of landed on that 25-year sentence as opposed to I think Madoff got 100 something.
