25 Years Isn't Enough for Crypto Crook Sam Bankman-Fried | Opinion

Sam Bankman-Fried, the former FTX CEO colloquially known as SBF, was finally sentenced on Thursday morning in Manhattan.

When Judge Lewis Kaplan, who oversaw the month-long trial in November, sentenced SBF to 25 years in prison, it marked a new chapter in the ongoing debate as to what would be a fitting prison term for his crimes.

Last fall, SBF was found guilty of several illegal activities, including securities fraud, money laundering, fraud, and conspiracy. He was convicted on seven counts of fraud and conspiracy, stealing from customers of his cryptocurrency exchange, FTX, which eventually collapsed. He also directed his co-conspirators to commit crimes, leading to his conviction on multiple criminal charges.

Child-like appearance and demeanor aside, the prosecution rightfully portrayed him as a grown-up criminal involved in financial fraud and highlighted his involvement in fraudulent activities that resulted in massive financial losses for others.

The U.S. Department of Justice had recommended a sentence ranging from 40 to 50 years, emphasizing the magnitude of his alleged crimes involving significant financial losses and numerous victims. However, Bankman-Fried's defense argued for a much shorter sentence of five to six years, citing factors such as his remorse, charitable works, and lack of criminal history. There was also a huge push as sentencing drew near for a reduced sentence as the bankruptcy lawyers running FTX believe they can fully settle the claims of legitimate creditors and customers—which the judge today derided as "misleading and logically flawed." Instead, Kaplan ordered $11.2 billion to be paid by SBF in restitution.

No matter what the sentence was that came down today, it was going to be a lose-lose situation. As Attorney Ken Fulginiti explains, "As is often the case where someone in the public spotlight is sentenced, public opinion is sure to be divided as to whether Mr. Bankman-Fried's ultimate punishment fit his crimes."

I wrote about SBF in Newsweek right after his indictment and predicted that, yes, he would go to prison. In writing about the shared fates of SBF and Elizabeth Holmes, I opined that "Both possessed the instrumentalities of control. The fraud and frauds their companies successfully endeavored to do are things that speak for themselves."

I stick with that analysis six months after I wrote it. If no one is at the wheel, then we're collectively doomed.

If our society has become one in which startup founders (whether trading in blood analysis or fictitious money) can chase every opportunity with no fear that breaking every law in sight along the way will get them a fitting punishment, then we're in deep, deep trouble.

And I think we're there when we consider the SBF sentencing.

It's important to remember that in SBF's sentencing brief, his lawyers asked for 63 to 78 months in prison on convictions that have a maximum sentence of 115 years or 1,318 months.

As someone who has worked with a generation of startup founders, I think that something closer to 1,318 months would have been appropriate.

The scope and depth of the fraud perpetrated by Bankman-Fried is, unlike anything we've ever seen in the financial space, and was amplified by how odious a character he is. In an era where we are hoping that the kids are alright, SBF shows us that we have work to do.

Okay, putting my hat on as someone who has a law degree and paid attention in some classes decades ago, the legal foundation in the U.S. for prison sentences for felony convictions being punitive is deeply rooted in the history and evolution of the American criminal justice system.

As Fulginiti explains, "Over the years, sentencing practices have become stricter, with the adoption of policies like mandatory minimum sentences, truth-in-sentencing laws, three-strikes rules, and life sentences without the possibility of parole. These changes have deeply affected the criminal justice system, resulting in longer prison terms, overcrowded prisons, and a notably higher rate of incarceration among individuals, especially among Black Americans."

And while there is ample evidence showing that this punitive approach does not enhance community safety as claimed and causes more harm than acknowledged, the U.S. criminal justice system needs to rely much more on remarkably harsh punitive sentencing specifically when it comes to felons such as Bankman-Fried. This should be especially noted today as the judge made it extremely clear that SBF also committed witness tampering and perjury, to round out the trifecta with fraud.

And the reason for this is because his actions have been those of a terrible person. Aside from the fact that SBF was seemingly empowered by everyone on his journey from investors to his parents (all of whom should have known better and surely did), he created his own persona, exactly as Elizabeth Holmes did. So, while both of them set out to be startup superheroes, they were more than willing to embrace the actions and inactions that ended up making them supervillains.

And supervillians should be superpunished.

That's not what happened today.

SBF's 25-year sentence (he'll never serve the entire thing) sends no message to anyone else cooking up their own grand scheme to not only become a billionaire but to become the richest person in the world. That's always the mentality—go big (biggest, to be precise) or go home. Trivial and ephemeral ideas, such as the law, what is right, and what's good for other people, don't factor into the calculus. All that matters, in the parlance of our times, dude, is being locked in and crushing it (no matter what actually gets crushed).

Moralizing aside, are we sure we want SBF back out here in ____ years doing SBF things? Prison sentences aren't done through a Twitter poll, but if they were, would the plurality of us have let him out so relatively soon?

From Elizabeth Holmes to Sam Bankman-Fried to whomever is next and the next after that, we have, more than we'd like to realize, become desensitized to people looking to build something truly massive giving themselves the power and forgiveness to chart not only their own path but set their own rules along the way.

A Pulitzer Prize-nominated writer, Aron Solomon, JD, is the chief strategy officer forAmplify. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Aron has been featured in Newsweek, Fast Company, Fortune, Forbes, CBS News, CNBC, USA Today, ESPN, Abogados, Today's Esquire, TechCrunch, The Hill, BuzzFeed, Venture Beat, The Independent, Fortune China, Yahoo!, ABA Journal,Law.com,The Boston Globe, and many other leading publications across the globe.

The views expressed in this article are the writer's own.