SBF sentenced to 25 years in prison: Full record of sentencing hearing, victims cry out that three have already committed suicide

Compilation: Cat Brother, Wu Says Blockchain

On March 28 at 21:30, SBF was tried in Manhattan Federal Court and was ultimately sentenced to 25 years in prison by the judge for fraud involving billions of dollars. SBF stated he would appeal the conviction. The judge also suggested that he be incarcerated in a facility near his parents' home in California, noting that his notoriety and autism made him more vulnerable to harm. Although the federal system does not allow for parole, he may be released several years early if he behaves well. Earlier, prosecutors had recommended a 40-year sentence, which could have led to life imprisonment according to the guidelines.

Inner City Press live tweeted

Bloomberg reported

Judge Kaplan
We will start with the U.S. dispute over losses exceeding $550 million. I reject the defense's arguments regarding the losses, both legally and factually. The claim that clients and creditors would be fully compensated is misleading. Investors and lenders are also victims. The crimes here include taking FTX clients' funds, which the defendant had no right to use, and using them for speculative investments by Alameda and various other matters.

The incidental rise in the value of certain cryptocurrencies is irrelevant to the severity of the crimes committed. A thief who takes his loot to Las Vegas and successfully gambles it away should not receive a reduced sentence even if he repays the stolen money. The notion that people will be repaid is merely speculative; the losses far exceed $550 million, which is the highest level. I believe investors lost $1.7 billion, lenders lost $1.3 billion, and clients lost $8 billion.

In terms of obstruction of justice, I believe Mr. SBF's text messages to the former general counsel actually constitute an attempt to interfere with witnesses. Based on trial testimony, I made three findings of perjury, including: falsely claiming that until the fall of 2022 he was unaware that Alameda was using FTX client funds; falsely claiming that he first learned of an $8 billion shortfall in October 2022; and falsely claiming that Alameda's repayment of third-party loans would require Alameda to borrow more client funds from FTX.

I have limited my findings on obstruction of justice—there may be more. The overall crime level is 60, and once it exceeds 43, it cannot go higher. The guideline recommendation is life imprisonment. But in this case, the maximum sentence is 1320 months.

Victim Sunil
I want to respond to that argument about losses being zero. They continue to claim this in the media. This is not true. I have suffered for two years. The bankruptcy estate is assuming or misrepresenting us as unsecured creditors. We have property rights. Sullivan & Cromwell (note: FTX's bankruptcy law firm) has trampled on our property rights. They have liquidated billions of dollars in crypto assets. There is a token that S&C sold for 11 cents, and now it trades at two dollars. FTX had $10 billion in Solana tokens—they sold it at a 70% discount. They are selling it to their own clients—Galaxy—this is undermining client value. This is our property. Then there is Anthropic. Our assets were used to purchase shares. This is our property. I raised objections, and thousands of clients support me. At least three people have committed suicide due to FTX's fraud. So, when this FTX bankruptcy… I guess… what I feel, and its relation to Sam, it hurt me, and other conspirators, accomplices, and instigators need to be held accountable.

Defense Attorney Mukasey
I do not want anything I say today to be seen as disrespectful to the jury—we will appeal—nor do I want to disrespect the victims; we have listened, and we understand the pain. My team did not experience the trial firsthand, but we have studied the record. The government pointed to James Nicholson, who stole from a widow. Carl Greenwood was sentenced by Judge Ramos. Madoff stole from Holocaust survivors. (Note: By mentioning these figures and their crimes, the defense attempts to show that while SBF's actions are controversial, they should be viewed with more leniency compared to other crimes considered more severe and premeditated.)

But that is not Sam. He did not want to cause anyone pain in any way. Sam is not a ruthless financial serial killer. He is not predatory. He makes decisions based on the math in his head, not malice in his heart. His mother says he has been misunderstood. It is easy to label people as greedy fraudsters… Sam never rushed off with money. He stayed until the end. He would tell you how much it meant to him that people were repaid. He is an awkward math nerd. He is passionate about veganism. He has extraordinary intelligence. He is a wonderful puzzle. His ability to parse words is better than that of Talmudic scholars. He is a billionaire who does not care about material possessions. In high school, he was already thinking about ethical obligations to the global population. In college, he spent time helping animals. On Wall Street, he donated his income to charity. That was until he was 21. Sam's dedication to others existed long before FTX. He never intended to become the king of cryptocurrency. He just wanted to make the biggest positive impact in the world. But that is not the means to an end; that would harm the altruism movement… now who still supports him? Not Tom Brady or Katy Perry (note: both are American athletes and pop singers who invested in and promoted FTX). Supporting him are scientists. This is not performative. SBF is committed to doing good… he has been mentoring people in MD (Metropolitan Detention Center). He knows what it feels like to leave a bad impression, practicing how to make eye contact the right way.

His mother says he has a terrible sadness inside him. His brother says, Sam feels uncomfortable giving me a hug—but I know if I needed it, he would give me a kidney… he has spent the last seven months in the worst prison in the country.

I understand there must be a sense of justice achieved. I think of the case of Stefan Irving—he was a predatory person and was only sentenced to 21 years. Do not destroy this kind young man's golden years. Let him meet a partner and have a child. Sentence him to work hard and donate everything. A few years ago, Judge Koeltl wrote an article about Judge Weinfeld, telling the story of a white-collar defendant who scattered the charitable bread upon the waters and then returned. Sam has always been kind—let him reap the rewards. We ask you to judge him with a compassionate heart.

Defendant SBF
I am grateful for Mark's assessment of me. What matters most today is not my emotional life or hypothetical future children. Some clients, I mostly agree with what Sunil said about what they have gone through, clearly money they never expected to use, they have been deprived of their earnings. They have been waiting for a year and a half. What matters is my FTX colleagues, I destroyed everything they built. They feel disappointed, and I am sorry for that. I am sorry for every stage of what happened, for what I should have done and said, and for what I should not have done. I care deeply about everything. Remember those colleagues, who followed me across the land, across continents, working until 2 AM… I remember, many of them, Natalie taught herself, managing a media department, she took on the workload of ten people by herself. I gave my brother a crazy idea about how to save lives. It seemed feasible. One day, Gary sent me a message with a link to a cryptocurrency exchange—the entire industry is rebuilding according to the model Gary created. Many of the things he built became industry standards.

Alameda was facing the danger of collapse. I received an anonymous message telling me what to do to fix it. It was clearly from Nishad, known for his humility. Then there is Caroline, quite remarkable, almost entirely self-taught, she sought my advice on employee reviews. I read her evaluation of someone and learned a lot. They were all fully invested, and then I threw everything away. This haunts me every day. I made a series of bad decisions, and these decisions were not made out of selfishness. These decisions, combined with other factors, ultimately led to the crisis.

Alameda did not go bankrupt, nor did FTX—Alameda's profits disappeared, and its leverage exceeded reasonable levels. We had to liquidate to cope with the run on FTX. Then we shut it down. FTX could have survived, but Alameda could not. It was an unpleasant experience over several weeks. I made many mistakes, but the story did not end there. Clients were not repaid, and FTX did not survive. Yes, clients received conflicting statements. This caused tremendous harm. They could have been repaid. The assets were sufficient, not because of the rise in cryptocurrency prices, which actually did not harm; in fact, the assets were sufficient. As Sunil said, it is emotional pain. Why were they not repaid? Fairly speaking, there was a liquidity crisis, part of which is my responsibility. This is neither the time nor the place to tell the complete story.

In the Bahamas, Ms. Rolle's office was hacked a few days after the bankruptcy event. I was also in the Bahamas that day. Christina Rolle came to FTX headquarters personally to ensure that assets would not be lost further. It was a Saturday, and the work continued until 3 AM. This act was truly inspiring. Indeed, some people stood up to speak for the clients. But unfortunately, most people, including myself, disappointed them. As the CEO and leader of FTX, the ultimate responsibility lies with me. When things go wrong, the reasons no longer matter; as CEO, all responsibility is mine. Ultimately, I am not the most important person… I think my useful life may be over. I have done everything I can, but I cannot do more from prison.

Regarding the sentence I will receive, whether it is 5 years or 40 years, I have no control over it. I understand how the prosecutors, the court, and the media view me. You mentioned my previous attempts to communicate with the general counsel. I was trying to help—but the prosecutors and the media do not see it that way. I want to respond to Sunil's earlier comments. I understand what he means; we seem to be denying the existence of pain. It is understandable that people might interpret it this way. Our focus may not have been in the right place. Indeed, clients have been suffering.

Ultimately, it seems that clients will be repaid based on the current value of the assets. The same goes for lenders and investors. I wish I could do more to facilitate this; I believe I have failed in this regard. I am not sure why this is the case, but I do believe I made mistakes. There was an opportunity to do what I originally wanted to do for the world, rather than what I ultimately did. If everyone could do their best for the world, I hope to see their success, not just my failure.

Prosecutor Roos
SBF stole $8 billion. This is a theft from clients around the world. This is a loss that has had a significant impact on people and caused harm. I want to respond to some new victim letters. They lost their life savings. One gentleman living in Portugal—on the day before the bankruptcy, his daughter was born. He is haunted by the ominous shadow of financial instability and his daughter's future. Then there is a 23-year-old young man from Morocco. He is the eldest son in his family. He deposited money on FTX not to lend to the defendant, but for the safety of his family. There is also an elderly couple in their 60s who invested their life savings. They feel frustrated and have to return to work.

Mr. Mukasey said the defendant did not look his victims in the eye. I disagree. Nowadays, people look each other in the eye through Twitter. Now, the defendant has also taken $1.7 billion from investors—just this alone warrants a long sentence. For this alone, some people would be sentenced to 40 years or more. There are also lenders; two lenders went bankrupt. This independently proves the need for a severe sentence. And one of the largest bribes in history. He committed perjury. This is also widespread.

You have a cost/benefit analysis for the defendant that would lead him to do it again. If SBF believes the mathematical reasoning is sufficient, he would do it again. Today he talked about mismanagement, a "painful few weeks"—without accepting responsibility. He did not vow to never do this again. He mentioned the opportunity to restart FTX or an equivalent. I think this tells the court exactly what might happen. A sentence of at least 40 years is needed to ensure he does not do this again. Mr. Mukasey said the defendant is moral… the defendant is not a monster, but he committed serious crimes that harmed many people—and he would consider doing it again. So the recommended sentence is 40 to 50 years.

Judge Kaplan
I considered the guidelines and real-world factors. Many statements regarding the defendant's background are undisputed. He was born into privilege, with loving and devoted parents, and he had all the advantages they could give him; he attended MIT. He is very intelligent and has autism… he is a high-achieving autistic person. He can achieve great things, but he often appears socially awkward, interacting with people in unusual ways, sometimes even repulsive. He went to Jane Street, made a lot of money, and donated a lot. There was testimony during the trial, I do not remember who said it, but I learned that people at Jane Street were encouraged to participate in quantitative trading. He was extraordinarily ambitious, aware of his talents. Ms. Ellison confirmed he was very ambitious. He talked about building two large companies, was very interested in politics, and wanted to influence politics with his money. He said he had a 5% chance of one day becoming president. Indeed, this is a massive financial crime. He wanted to be politically influential in his country. This is not just the left end of the political spectrum.

He set up a mechanism to donate to the right through intermediaries, donations that would not come back to him. These actions, at some point, might be seen as part of his self-presentation as supporting appropriate regulation of the crypto industry. In my view, that was a performance. Ultimately, he also admitted it. On November 15 or 16, he gave an interview to a reporter he was familiar with, who said, you have said a lot about good regulation—was that just a public relations stunt? He said, "Yes, screw the regulators."

When asked how the defendant described his view of risk, Caroline Ellison replied: he said he was neutral on risk, as long as the expected value (E.V.) was positive, he felt comfortable. A person willing to flip a coin to decide whether life on Earth continues. SBF knew that Alameda was using client funds for risky investments, political donations, and real estate in the Bahamas. These funds were not available for him to use. One of his more succinct expressions, I think, is "I messed up." SBF has the right to plead not guilty and go to trial. Everyone has that right, and I do not blame him for it. But I return to Ms. Ellison's testimony. He knew it was wrong. He would not admit anything. That is his right. Specific deterrence? His name is mud worldwide. But he persists; he is a great marketer. Mr. Roos correctly pointed out that the revised profile of SBF is very clear.

Even after his arrest, he still used the same skills to market his story to a large number of media people. He has the right; we discussed this point… in general deterrence, the criminal justice system can only survive when it is seen as fair. People need to feel that this is fair. Otherwise, we are back to trial by combat, friends, or something similar. Therefore, the punishment must match the severity of the crime. This… is… a… serious… crime. Please listen to me patiently.

Defendant, please stand up to receive your sentence… [SBF stands up, and his three lawyers also stand up]

I know the probation department recommended 105 years, while the government suggested 40 to 50 years. That would be more than necessary. I am not minimizing the harm. His behavior is shameless. His extraordinary flexibility with the truth. He shows a clear lack of remorse. I want to add one more thought. I think taking the time to detail every lie is not a productive approach—when he is not lying, he is evading questions, nitpicking, trying to get the prosecutors to restate the questions. I have been doing this work for nearly 30 years. I have never seen such behavior.

The court sentences SBF to 240 months, followed by 60 consecutive months, totaling 300 months (25 years).