The judge sentenced FTX's former CEO Sam Bankman-Fried, who was accused of fraud, to 25 years in prison.
According to the judge's recommendation, SBF will serve his sentence in a prison close to his family in the San Francisco Bay Area.
Prosecutors had previously requested a 40-year prison sentence. According to the rules, the punishment was life imprisonment.
Judge Lewis Kaplan announced his decision following a hearing in a Manhattan courtroom following Bankman-Fried's conviction on seven felonies in November, a year after FTX filed for Chapter 11 bankruptcy.
The former FTX CEO is expected to appeal Kaplan's conviction, a process that should not begin until after the sentencing decision.
Bankman-Fried was facing up to a hundred years in prison based on his parole officer's report. Kaplan did not adhere to this advice. While Bankman-Fried's defense team, a different group of lawyers from those who represented him during the five-week trial, did not seek a sentence of more than 6.5 years, prosecutors from the US Department of Justice requested a prison sentence of 40 to 50 years.
How long will Sam Bankman-Fried, who was sentenced to 25 years in prison, actually spend time in prison?
Because Bankman-Fried received a sentence longer than a year, he will likely receive an automatic 15% sentence reduction.
Part of that 3.75-year discount could be added to prison time if the FTX founder gets into serious trouble while in prison.
But beyond that 15% reduction, Bankman-Fried will almost certainly spend most of the remaining 85% of his sentence (a hefty 21.25 years) in federal prison.
There are only a few exemptions and loan programs that can shorten SBF's time in federal prison. And even in the best-case scenario, such reductions may shorten the period by only a year or two.
*This is not investment advice.
