SBF: See you in 25 years

Young man with bright clothes and vigorous horses

In San Francisco in 2021, every visitor to this West Coast city will find huge FTX advertisements everywhere in the city’s core area, featuring Sam Bankman-Fried and his iconic hairstyle.

"Who is this guy with an afro?" tourists often ask. "Oh, that's SBF," locals will proudly tell them, "He grew up in the Bay Area and is now the CEO of the best exchange. Do you know Bitcoin?"

At that time, FTX was the most popular in the United States. The bull market in the crypto world allowed this American-backed exchange, which started out as a derivatives exchange, to take off. Not only did it firmly sit in the position of the world's second largest exchange, its valuation also reached a staggering $32 billion, which is roughly equal to the annual GDP of El Salvador (yes, the country famous for Bitcoin).

All of this is the result of SBF and his team within 5 years. SBF has become the "Poster Boy" in the circle. People call him the king of cryptocurrencies, admire his "effective altruism", and make a lot of money on FTX with multiple leverage. This is what a bull market looks like.

If you search the news in 2021, you will find that his image is completely different from the prisoner today. At that time, SBF was no longer content to be a successful person in the crypto circle, but tried to make himself a rising star in politics and business.

He became a frequent visitor to Congress and Washington, and donated $5.2 million to Biden's presidential campaign, ranking second among donors; he publicly declared that he was willing to support high tax rates for high net worth individuals. At that time, many leading media, both inside and outside the circle, were proud to be able to interview SBF.

At that time, it was only 7 years since he graduated from MIT.

The rest is history familiar to readers.

In 2022, Coindesk released information about Alameda Research's balance sheet, and market confidence began to waver. CZ's tweet officially started the FTT sell-off. Even if SBF proved himself on Twitter and told investors over and over again that their funds were safe, FTX inevitably went into a run.

In a short period of time, FTT lost more than 80% of its value, and SBF went from being a young and famous CEO to "one of the biggest financial fraudsters in American history" overnight.

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

A year later, the jury, facing the deserted SBF, declared him guilty of all seven charges.

Judgment Day

On March 28, local time in the United States, the judge announced that Sam Bankman-Fried was sentenced to 25 years in prison for fraud and was required to pay a fine of $11 billion. This sentence is said to be less than the 40 to 50 years in prison that federal prosecutors wanted, but far exceeds the five to six and a half years recommended by his lawyer.

Judge Kaplan, who presided over the case, bluntly stated that he had never heard SBF express any remorse for the serious crimes he had committed. He said that in his 30 years as a federal judge, he had "never seen" anything like SBF's trial testimony.

SBF said "I don't know" hundreds of times during his testimony in court, avoided several key questions, and was even speechless when asked by the prosecutor's lawyer. For the jury, this was tantamount to an admission of certain factual issues.

Before handing down SBF's 25-year prison sentence, Judge Kaplan said there was a risk "that this person might do something very bad in the future (after being released from prison), and that is not an insignificant risk."

What SBF and his lawyers have been doing is to portray SBF as a nerd. Not only was this the strategy before the trial, but until the day of trial, SBF's lawyer Marc Mukasey was also trying to create a harmless image when he asked Kaplan for leniency, and FTX was an unintentional mistake made by this nerdy scientist.

“Sam is not a heartless financial serial killer who goes out every morning to hurt people,” the lawyer said. Instead, “he’s a clumsy math geek” with a “tireless work ethic.” SBF, he said, should not be confined in a “four-by-four metal box.”

The lawyer said that judging by SBF's diary, he "could not feel joy or happiness".

And prosecutor Roos said FTX’s collapse in late 2022 was not due to “a liquidity crisis or acts of mismanagement.” “It was the theft of billions of dollars in customer funds around the world,” the prosecutor said.

Final Confession

In court on the day of the trial, SBF had a chance to speak. At this moment, speaking had become a embellishment after the overall situation had been decided. After the lawyers had finished their arguments and the judge had basically set the tone, there was actually very little that SBF could do.

So he spent about ten minutes speaking a lot in almost completely syntax-free English, which also gave us a glimpse into the psychological state of this once-proud man after the dust settled.

SBF said, "One important thing is my colleagues at FTX, I wasted what they built. They are disappointed. For this, I am sorry, for what happened at every stage... things I should have done and things I said, things I shouldn't have done... I really care about everything."

He forgave the three people who were once part of his core team and now stood in the witness stand to testify against him. He said, "The entire industry rebuilt itself in Gary's model, and many of the things he built became industry standards. When Alameda was in danger of collapse, I received an anonymous message telling me how to solve the problem, and it was obviously from Nishad, who was famous for his humility.

And Caroline, who is pretty amazing and mostly self-taught, asked me for advice on her employee reviews. I read her review of one person and I learned a lot. They put their heart and soul into it, and then I threw all of that away. I made a series of bad decisions. They were not made out of selfishness.”

He also said, I was the CEO of FTX, I was its leader, which means that ultimately I am responsible. "If you are the CEO, no matter why things go wrong, the responsibility is on you. I am not the most important person in the end... My useful life may be over. I have already given what I can give."

Finally, as if he had exhausted all his strength, he said this: "There was such an opportunity that I could 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 as SBF, wearing a tan prison jumpsuit, with his hair growing out again, unlike the short hair he wore during the trial, standing with his hands crossed in front of him, and not reacting as the judge read out the verdict, with his eyes downcast. His mother, Barbara Fried, looked out the window, while his father, Joe Bankman, held 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 will most likely be sent to a medium-security facility. Zoukis said SBF will most likely end up at FCI Herlong, near the Nevada border, or FCI Mendota, about 135 miles southeast of his parents' home in Palo Alto.

Although there is no possibility of parole in the federal criminal case, SBF has a chance to reduce his 25-year sentence through good behavior.

Former federal prosecutor Mitchell Epner revealed that if SBF took advantage of all available commutations, he could have served as little as 12.5 years in prison. Federal prisoners typically receive up to 54 days off their sentences for each year of good behavior, which is roughly a 15% reduction in their sentences.

Since the enactment of the 2018 First Step prison reform legislation, sentences for nonviolent federal inmates may be reduced by as much as 50%. In addition, special grounds, usually medical, also allow courts to reduce sentences.