Today Sam bman freed is sentenced to More than two decades in prison and we Speak to two legal experts for analysis On his sentence and what it means for The crypto industry at Large welcome to cnbc's crypto world I'm Mackenzie seallow outside the courthouse With Sam bakman freed was just sentenced Over the multi-billion dollar fraud that He oversaw at FTX we'll talk all about That in just a bit but first let's take A quick look at crypto markets by new Eastern Bitcoin Rose back to the $71,000 Mark ether climbed to 3578 and salana Jumped to $187 okay let's jump right to the Sentencing of Sam bankman freed southern District of New York judge Lewis Kaplan Sentenced the disgraced FTX executive to 25 years in prison out of a maximum 110 Years for the massive fraud and Conspiracy that led to the collapse of FTX judge Kaplan said SPF had perjured Himself on the St And argued that it's not a trivial risk That he will commit more crimes in the Future he added that in his 30 years as A judge he's not seen a performance Quite like this one from Sam bakman Freed in October which included evading Certain questions while on the stand During his trial bigman freed took the Stand once again today delivering a Winding apology statement saying that he
Had made bad decisions that haunt him Every day he claimed responsibility for What happened and said that he was sorry That customers were depressed red of Their cryptocurrency gains attorneys for Bankman freed were seeking a sentence of 5 to 6 and a half years citing medical Conditions including autism and that Harm to customers would be Zero thanks To the bankruptcy process however FTX CEO John Ray told the judge last week That creditors would never be fully Recovered and called the estate a quote Metaphorical dumpster fire prosecutors Were seeking 40 to 50 years in prison Saying that their suggested sentence was Appropriate given the extraordinary Dimensions of SP spf's crimes today Judge Kaplan rejected the entirety of Bitman Freed's argument that there was No loss at FTX calling that claim Misleading logically flawed and Speculative Kaplan presided over bitman Freed's trial which ended in November When a jury found him guilty of seven Counts and held him responsible for the Roughly 10 billion dollar of customer Deposits that went missing in 20122 Spf's parents didn't speak to reporters As they left the courthouse post Sentencing but short thereafter a family Spokesperson issued a statement saying That they're heartbroken and will Continue to fight for their son bigman
Reed is expected to appeal today's Decision but his attorney declined to Answer reporter questions us attorney Damen Williams issued a statement on the Sentencing saying that as a result of His unprecedented fraud biton freed Faces 25 years in prison forfeiture of Over a billion dollars and restitution To his victims today's sentence will Prevent the defendant from ever again Committing fraud and is an important Message to others who might be tempted To engage in financial crimes that Justice will be Swift and the Consequences will be Severe now for some analysis on the Sentencing and what it means for the Crypto industry at large crypto worlds Talia Kaplan spoke with Paul tuckman a Former Federal prosecutor and lawyer at Wigan and Dana along with Zach Shapiro From the crypto Focus Law Firm Reigns Paul you're a former Federal Prosecutor with experienc Prosecuting And defending fraud investigations here In New York you served as an assistant Us attorney for the US attorney's office For the eastern district of New York for More than a decade so given your Experience I want to start off by asking What do you think about Sam bankman Freed's sentence were you expecting 25 Years his lawyers were seeking a Sentence of five to six and a half years
Prosecutors were seeking 40 to 50 years So are you surprised that judge Kaplan Sentence make been free to 25 years in Prison given that represents a pretty Significant departure from what Prosecutors were Seeking uh yes frankly I am a little bit Surprised based upon um the demeanor and The rulings that judge Kaplan made During the trial uh as well as the Arguments the prosecutors made the judge Kaplan both during the trial but then Also during the sentencing proceeding Today generally uh agreed with the Prosecutors on in terms of the nature of The seriousness Of s spf's conduct uh the loss amount uh The fact that he perjured himself judge Kaplan found during the course of his Testimony of trial and lot of all of Those findings that judge Kaplan made uh I frankly found it a little surprising That the sentence was uh not a bit at Least a bit higher certainly uh not Necessarily the 40 to 50 years that the Prosecutors were seeking but um I you Know 25 years was on the low end of what I was expecting going into this Sentencing hearing today and then Particularly as I said after judge Kaplan reached those um findings about The perjury and about the loss amount so Paul expanding on that today bman freed Took the stands and had a remorseful
Tone quite the contrast from his Testimony during his trial bankman freed Claimed responsibility for the collapse Of FTX and said he was sorry that Customers were deprived of their crypto Gains so do you think those comments on The stand today played into a sentence That all it's important to note though That this morning judge Kaplan increased The sentencing guidelines range for Being been freed to a maximum possible Sentence of 110 years after finding that He had committed perjury at his trial And knowingly obstructed justice so it Sounded from the GetGo that he wasn't Going to be Lenient it did sound that way and I I Don't think that um the statements that Um bankman freed made during his Sentencing necessarily um were uh part Of the reason why he got what I would Expect a lower sentence than I expected To see him get certainly on the one hand He did Express I don't know if I would Want to call it remorse but he did Express regret and sort of sadness for Um his colleagues um at FTX as well as To the investors um or not so much the Investors but the depositors who lost Money certainly he said that he was sad That they lost money and it in some way It seemed that he acknowledged some kind Of respons possibility for the fact that They did lose money but at the same time
Uh importantly because he has an appeal Pending and therefore anything he says Today that indicates um that he actually Um agreed agrees that he did commit a Crime he's continuing to maintain his Innocence through the appeal process and If he was to win an appeal uh any Admissions that he makes in the course Of the sentencing proceeding could be Used against him at a future trial and So for that reason he didn't fully I Would say and I think judge cap agreed In the remarks that that that I saw Quoted didn't really agree that um or Believe that s SPF had truly been Remorseful and in fact one of the things That judge Kaplan said when imposing Sentence was that he had a real concern That bankman freed um when he whatever He concluded his sentence was in fact a Danger to commit another crime like this In the future and certainly if um the Statements that SF made it sentencing to The judge um certainly uh if those had Been suc successful in his the goal is Truly showing remorse that I I certainly Don't think judge Kaplan would have um Made that reached that conclusion during The sentencing hearing Today so Zach what's your reaction to Bankman Freed sentence today judge Kaplan rejected spf's argument that There was no loss at FTX calling the Claim misleading logically flawed and
Speculative based on everything that Happened in the courtroom today were you Expecting 25 years and do you think the Victims will think this sentence is Appropriate and fair Yeah thanks uh I think 25 years is is Pretty close to what I would have Expected I would maybe even expect a Little bit lower um the way Federal Sentencing Works uh in criminal cases is Judges have to start by calculating a Guidelines based sentence using an Elaborate formula uh those guidelines Used to be mandatory in terms of what Judges had to sentence people for now It's just a starting point um but when You deal with crimes that have big Numbers involved whether that's you know A large quantity of drugs or in this Case a large amount of money uh that's Gone missing the end output of those Guidelines tends to be a really large Number and so it's not surprising the Judge would do a downward departure uh From the guidelines calculation and that Really puts the sentence into a question Of what would the judge you know judge Kap this case think is fair um and we're Talking about a white collar crime here Right a bad white collar crime a really Big white collar crime a Brazen one uh But if you look at murder sentences uh In gang trials in the southern district Of New York those are often in the 20 to
25 year range and so I'm not surprised That uh Z pman Frey didn't get a 40 or 50y year sentence uh I do think that his And his lawyers performance today uh Were pretty bad um his lawyer Mark Mesi Really painted him as sort of a a hero Of some sort called him a beautiful Puzzle pointed out his veganism called Him you know he read like a ttic scholar And I think that really maybe missed the Point in terms of how much damage he Caused of course there were losses um The fact that the ft made some lucky Venture Investments that were able to Make creditors whole as of the Bankruptcy notably not in crypto terms But in you know the bankruptcy terms I Don't think absolved him of any of the Crimes the fact that he seems to have Perjured himself down the stand also Certainly didn't help uh and the fact That when Sam testified himself today he Was more focused on the facts of what Happened than showing Contrition to the Victims I think also didn't help so I Think 25 years is a harsh sentence uh I Think it was in the expected range uh But I think that this is just and what I Hope is I think a lot of the crypto Community was skeptical of what sentence He would get they thought he might get An unreasonably low maybe below 10year Sentence and that Justice wouldn't be Done and uh you know there were frankly
A lot of conspiracy theories about that And I think that you know it's good to Show the crypto community that Justice Does work at least in this case you are In fact a crypto focused attorney so in What ways do you see this case being a Template for the crypto space at large US attorney Damen Williams issued a Statement saying that today's sentence Sends an important m message to others Who might be tempted to engage in Financial crimes that consequences will Be severe do you think that message will Resonate with those thinking of Defrauding crypto investors from here on Out yeah I think so last time we spoke About this I'm mentioned that I think This is really more a story about old School fraud than it is about crypto Itself I think there's one way in which That's not true uh which is that the Crypto Community I think has to learn This lesson every couple of years that The whole ideal behind crypto is Creating open-source trust list systems Where you can see you know using a Blockchain or similar tool where funds Are uh what the mechanisms are to secure Funds and who has permissions to move Those funds and that obviously doesn't Work when you just trust a third party In this case FTX but there are other Examples famously mount goau in the Early days of crypto one of the early
Bitcoin exchanges uh when you trust Someone with your crypto assets they can Move it right and we're talking about Digital bear instruments that are easily Stolen so I think you know in so far This is an important lesson to the Broader crypto Community maybe it's less Towards the people who' commit fraud I Mean I think this is no different than Any other large criminal case in that Respect but for you know crypto Investors the people who are the Depositors who lost money in this case Uh to really think about who do you Trust to if anyone do you trust your Cryptocurrency with is it better to Self- custody or use a collaborative Custody model for cryptocurrency uh or To use sort of more quote unquote Trustless uh you know tools on the Blockchain to hold your digital assets Okay that's all for crypto world this Week we're off for Good Friday but we'll Be back again on Monday and we'll see You [Music] Then
