FTX Founder's Road to Early Release: Legal Loopholes and Behavior May Shorten Bankman-Fried's Sentence

Written by Henrik Rothen

Mar.28 - 2024 10:30 PM CET

Photo: lev radin / Shutterstock.com
Photo: lev radin / Shutterstock.com
Sam Bankman-Fried's 25-year sentence could be significantly reduced, thanks to the nuances of the U.S. correctional system, offering a glimmer of hope for the embattled FTX co-founder.

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n the wake of the monumental 25-year sentence handed down to Sam Bankman-Fried, former billionaire and FTX co-founder, legal experts suggest that the U.S. federal correctional system's policies might pave the way for his early release. Despite being convicted on multiple counts including fraud, conspiracy, and money laundering, Bankman-Fried's non-violent, first-offender status coupled with restitution plans might significantly reduce his time behind bars.

A Possible Early Exit

Nicole Brenecki, a civil attorney, shared insights with Newsweek on how Bankman-Fried's sentencing outcome was influenced by his legal standing.

"Although federal prosecutors sought a 40 to 50-year sentence, Bankman-Fried's non-violent first-time offender status played a key role in the determination of his 25-year sentence," Brenecki noted.

This same status is likely to be a crucial factor in potentially shortening his prison term through good behavior and participation in rehabilitation programs.

The U.S. federal system allows for sentence reductions for inmates who demonstrate good conduct and engage in rehabilitative activities.

Depending on his behavior, Bankman-Fried could see his sentence reduced by anywhere from 15% to 50%. Such reductions would translate to his possible release as early as 2036, significantly ahead of the original 2045 projection.

The downfall of FTX, once a titan in the cryptocurrency exchange market, serves as a cautionary tale of the volatile and often unpredictable nature of the crypto industry.

The firm's bankruptcy in November 2022 followed a tumultuous period marked by leaked reports, financial instability, and failed rescue attempts, leading to Bankman-Fried's resignation and subsequent arrest.