Should SBF Die in Prison?
It’s indisputable that Sam Bankman-Fried caused irreparable harm to many people. But should he die in prison?
When Bernie Madoff was sentenced to 150 years, the maximum possible in his case, there was a tacit — and sometimes explicit understanding among observers that Madoff would die in prison. At the time of his sentencing, Madoff was at an advanced age of 71. His lawyers had argued that a sentence of 7 years be imposed.
Madoff did eventually die in prison. He lived to 82, serving just over ten years of his 150-year sentence. Madoff’s scheme also lasted considerably longer than SBF’s — and he used all manner of deception to perpetuate this fraud on retail investors for years.
SBF, conversely, seemed to make a series of blunders and bad decisions that led to his eventual downfall. This is not to minimize or excuse his actions. Bankman-Fried is a criminal, and he deserves time in prison.
But most people harmed by people like SBF or Bernie Madoff want to be made whole, first and foremost. Exacting a pound of flesh is great, but most of us want that in the form of being paid what we’re owed. SBF isn’t much good to his victims in prison, but he could be made to be good to them on the outside. The young man has obviously demonstrated a pattern of lying and manipulation to cover up his lies, but he’s also demonstrated a pattern of making a lot of money.
The SBF-directed early seed investment in AI firm Anthropic provides some evidence of this. Thanks to this single investment, which admittedly involved luck, victims of the FTX fraud could potentially receive a much greater return when the bankruptcy is settled than they would have otherwise. Does this lucky break somehow excuse Bankman-Fried’s conduct? Of course not, no one thinks that. But, it does highlight the limitations of incarceration as punishment for financial crimes, especially when the perpetrator can be directed to do more productive things in terms of providing restitution to his victims.
Ultimately, SBF’s sentence is still to be determined. Many analysts, however, have called his prognosis bleak, both because of the standard sentencing guidelines as they relate to a crime with these particulars, as well as the judge responsible for the sentence having the reputation as someone likely to “throw the book” at the defendant. It’s unclear whether Bankman-Fried stands to receive a sentence of ten years or one-hundred and fifty, but the better, more just, and ultimately more pragmatic sentence would be one closer to ten years, with some provisions that upon his release, he is directed to work to pay any remaining debts owed to victims. Everyone would benefit from criminals like SBF being made to redress their wrongs meaningfully, rather than languish in prison — at taxpayer expense — for life.
These decisions, however, are, of course, left to our learned jurists, who have a great range of other factors to consider when imposing sentences, namely, deterring others from committing similar crimes. It is undoubtedly true that without a proper deterrence to this kind of conduct, we’re likely to see more of it, not less. With that said, justice should be tempered with mercy but also pragmatism. Ask the victims. If the priority is getting paid, and it’s easier for that to happen with a severe sentence but one that does not amount to the rest of this life, this is obviously the best course of action.
Regardless of any of these considerations, sentencing for Sam Bankman-Fried is scheduled to take place in April 2024.
