SBF will face trial next month before Judge Lewis A. Kaplan. However, some legal analysts have pointed out that there may be intense disputes during the trial regarding the amount of customer losses. Due to the recovery of the cryptocurrency market, SBF may face a lighter sentence.
As a brief summary, the FTX liquidation team plans to sell 35 properties in the Bahamas to repay SBF’s debts. The US Department of Justice has withdrawn six additional charges against SBF (bribery, bank fraud, etc.) and will directly sentence him in March next year.
FTX founder SBF, a bankrupt cryptocurrency exchange, will face trial next month before Judge Lewis A. Kaplan. Originally, the cryptocurrency community expected this trial to be a fair execution of the law. However, it is shocking that due to the recovery of the cryptocurrency market and the preservation of certain investments in FTX’s bankruptcy assets, SBF may face a lighter sentence.
SBF’s lawyers may argue “zero losses” for customers. In July of last year, the bankruptcy team stated that FTX’s global customer debt totaled $8.7 billion, and in November of the same year, SBF was found guilty on all seven charges by the jury, including fraud and money laundering. However, with the significant recovery of the cryptocurrency market since 2023, thousands of unfortunate creditors will have the opportunity to fully recover their previously locked funds, even calculated at November 2022 prices.
Therefore, Estes, a former US Assistant Prosecutor, stated in an analysis to Coindesk that there will be intense disputes during the sentencing phase regarding the amount of customer losses. Specifically, the FTX legal team may argue for a significantly lower loss amount, or even a loss amount of $0, if all customers and creditors can be fully compensated.
The compensation amount will affect the sentencing. According to the analysis of Jordan Estes, a partner at Kramer Levin law firm in New York City, the significant growth of the cryptocurrency market in the past year does have significant implications for sentencing, as the extent of compensation can be taken into consideration in the judgment. For example, for low-loss cases, the recommended sentencing range is 24 to 30 months. On the contrary, high-loss cases may result in severe sentencing ranges, with imprisonment of more than 20 years or even life imprisonment.
However, the US sentencing guidelines are only beneficial to the defendant when the funds are returned to the victims before the crime is discovered. In the case of FTX, it is evident that SBF himself is not returning the funds, and these compensations are being made long after the discovery of his crimes.
Coindesk uses the case of financial fraudster Bernie Madoff as an example. It is understood that Bernie Madoff died in prison at the age of 82 while serving a consecutive sentence of 150 years. In Bernie Madoff’s case, the bankruptcy trustee also recovered a large amount of stolen funds, but he did not receive any reduction in sentence. Prosecutors estimate the scale of the fraud case to be $64.8 billion.
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