Mar 28, 2024

Partner at Bryan Cave Leighton Paisner, Renato Mariotti, joins CoinDesk to weigh in on Sam Bankman-Fried's 25 year sentence that was handed down by Judge Lewis Kaplan.

Video transcript

Sam Bakeman Fried has been sentenced to 25 years in prison. Joining me now is Renato Marotti Renato, you are a trial attorney. You focus on financial fraud cases 25 years. This uh this afternoon we learned Sam Breed is gonna spend in prison. Are you surprised? I'm not too surprised. I think when I was on your show before, I said at least 20 years, uh it's about about the range that I would expect. Uh It is a significant sentence though, ok? Just so it's clear to everybody who is watching this uh for a fraud case, often you looking at a single digits in terms of years for the judge to give him, you know, 25 years suggests that ju you know, Judge Kaplan had no patience for Sam Frankman freed no love for him. And I think it was apparent throughout the sentencing that he took this to be a very, very serious case. Now, the reason I asked you if you were surprised is because a lot of people have been saying that investors are going to be made whole the bankruptcy estate has come out and said that investors will be made whole, they're gonna get the cash equivalent of the holdings they had, I believe back in November when the estate filed for bankruptcy. What did you make of that? Oh, look, the defense, uh, and his team, he has some good lawyers representing him. They were right to make those arguments, but the judge also was right to shoot them down. So, first of all, if you defraud somebody, it really doesn't matter if you end up paying them back later. Um, it is still a crime and that's something that the, that the courts take very seriously. So that's the first thing. Second of all, you're not fully made whole, ok. In other words, let's just say that I steal a million dollars worth of crypto from you and then I give you the crypto back in a couple of years. Well, you didn't have the opportunity to invest that money to do things with it. You, you didn't have liquidity, maybe you needed the money for something else. You didn't have access to it. I was using your money. So, you know, not everyone was made whole and the judge in the judge's view, I, I think, you know, he, he treated this with even less respect than that. I'm giving the argument. He basically viewed it as well, you know, the bankruptcy estate since you got lucky, uh the value of Bitcoin, uh other uh you know, other instruments went up and so that's all this was, this was luck, but that doesn't excuse what Sam Bank Andre did. Well, that's exactly what I was thinking. Bitcoin recently reached a new all time high investors who had that Bitcoin back when, uh, FTX went bankrupt would be sitting pretty happy right now, but they're not going to get to take advantage of that upside. That's exactly right. And, you know, look, people have all sorts of reasons why they need money and if you told me you were gonna wipe out my bank accounts. Uh, but don't worry, I'm gonna give it back to you in a couple of years. I'd be like, what the heck? Right. Because that's the point. I need to use that money for my family and for, for my goals and maybe I have investments I want to make. So, uh, uh, there was a victim who did testify live, um, and made that point to the judge that he did not feel like he was made whole and he felt like he was victimized. And I think the judge took that into account, but it was pretty clear from the beginning. Judge Kaplan, really? I had no patience for sbs arguments. What's life gonna look like for Sam Bateman freed from here on out? Is it possible he could get out of prison before the 25 year market? He'll likely get out before the 25 year mark, but he's gonna serve at least 20 years. So, in federal prison. Unlike state court, uh you have to serve the vast majority of your sentence. So even if you get credit for good time, good behavior, you're still gonna serve 85% which is a very long time, 85% of 25 years is over 21 years. That's a long time. It's gonna have a very significant impact on his life. But I think what the judge is trying to do, it was to give him a very lengthy sentence, but have it short enough. So that SPF would have the opportunity to have a life after this and, you know, potentially have a family after this was over. And, and that's, I think the balance that the judge was trying to strike. Well, speaking of that life, when Sam Beckman Fried gets out of prison, are there restrictions on what he'll be able to do where he'll be able to work? He will have uh conditions of supervised release. And, you know, they're going to have some restrictions right now. I predict that in 20 plus years they'll probably be revisited. Uh given that this industry changes from year to year, much less from decade to decade. Um But look, you know, this is gonna be transformative in his life, realistically, the knowledge is the knowledge and skills he has now aren't gonna be applicable to the life he has in 20 years. And I think, you know, but, but I do think he's had an impact on this space and we're already seeing the way in which it's impacting how regulators see this space. So the public use of space, I think just from the perspective of this community, from the in, in crypto in general, I think it's a good thing that the chapter of SPF is being uh coming to a close and we can now talk about other cases and other issues uh and not have too broad of a brush painted. I look forward to talking about those other cases with you before I let you go. I got to ask you about Sam Bateman Fried's parents, both professors at Stanford. Uh I believe they are still professors at Stanford. Last I checked they were still listed on the site there. How do you think this case is going to impact them? Well, it, it has already had quite an impact. So, first of all, uh they are facing lawsuits. Um There are allegations that they profited from SVFS uh criminal activity. And frankly, there are some people who believe I have many journalists calling me asking me, you know, questions about whether they could potentially be charged. Um I don't think that that's going to happen. Um I don't think they'll face criminal culpability uh but they really made out here a little bit. Um and they clearly, um up until the very end, have really been true believers in their son and have really tried to argue that he was innocent, even though there's plenty of evidence to the contrary at this point. Um, and so I think they've been embarrassed and disgraced, uh, even if they don't view it that way, um, and they are going to have to deal with, um, not only that disgrace, but also I would say the fallout, uh, from this, uh, you know, their financial dealings with FTX, uh, for years to come. And are they facing any civil litigation? They are, they are in the midst of very contentious litigation that claims that they were in on it and responsible all along. And there's some bad facts there uh particularly for Sp F's father who was quite involved and was in the thick of uh making some decisions with FTX uh and on FTXS behalf. And so, yeah, I think he bears some responsibility and that's gonna get litigated. It's gonna be, it's gonna be pretty contentious. And for that reason, um the, that chapter may be over for you and I talking about SBF but it's definitely not over for his family who I think are gonna be in litigation for some years to come. Renato. Thanks so much. Thank you.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.