WEBVTT - INSTANT REACTION: Bankman-Fried Sentenced to 25 Years

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Sam Bankman freed sentencing is coming out. He has sent

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<v Speaker 2>us to twenty five years in prison after being convicted

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<v Speaker 2>of fraud over the ft X collapse. Again, he's been

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<v Speaker 2>send us to twenty five years in prison after being

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<v Speaker 2>convicted of fraud over the ft X collapse. Not the

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<v Speaker 2>Bernie made off Nope situation, but then not the ten

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<v Speaker 2>eleven years of sort of the lower white collar crime.

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<v Speaker 1>Yeah, they're the defense was asking for, you know, six

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<v Speaker 1>and a half to seven years. And again the defense

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<v Speaker 1>the prosecution was looking for something in a forty to

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<v Speaker 1>fifty percent range and maybe splitting the difference. Hey, Barry,

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<v Speaker 1>just let you know, we got about a minute left here.

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<v Speaker 1>Just put into context if he can, in the context

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<v Speaker 1>of Bankman freed his sentencing here for twenty five years.

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<v Speaker 2>Yeah, what's your reaction?

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<v Speaker 1>What's your reaction?

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<v Speaker 3>So, you know, I'm more in the Michael Lewis camp

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<v Speaker 3>than than in I love Zeke Fox's book, but the

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<v Speaker 3>you know, when you look at everybody having recovered all

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<v Speaker 3>of their assets, the story perfect example of narrative fallacy.

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<v Speaker 3>The story of this guy is a genius who has

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<v Speaker 3>figured out how to make crypto modernized, and then oh,

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<v Speaker 3>it turns out that they're foamingling funds. Yep, and they're

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<v Speaker 3>kind of running everything on the fly. It's amazing how

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<v Speaker 3>one narrative story failed and was replaced by another. This

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<v Speaker 3>is very similar to Fairhose and what happens there. We

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<v Speaker 3>love these stories and they often deceive us.

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<v Speaker 1>Yep. Absolutely, Hey, Parry, thank you so much for joining us.

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<v Speaker 1>Barry Rodholts, host of Master's in Business on Bloomberg Radio

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<v Speaker 1>and the founder of Rodholts Wealth Management. Again the key

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<v Speaker 1>data point here, as Alex just mentioned, Sam Banking Freed

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<v Speaker 1>sentenced to twenty five years in prison, ordered to four

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<v Speaker 1>foot more than eleven billion dollars. Let's bring in June Grosso,

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<v Speaker 1>Bloomberg's legal analy She joins us here on Bloomberg Interactive

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<v Speaker 1>Broker Studio. Initial reactions juram Well.

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<v Speaker 4>I think it's a very tough sentence, but it was

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<v Speaker 4>expected to Judge Kaplan before the trial said that he

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<v Speaker 4>increased the sentence in guideline range because he found that

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<v Speaker 4>Sam Bankminfried had perjured himself at his trial. He found

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<v Speaker 4>that he committed witness tampering. If you remember, he put

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<v Speaker 4>him into prison before trial, despite this huge bail package,

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<v Speaker 4>because he felt that he was campering with a witness,

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<v Speaker 4>and he said there was a loss to investors of

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<v Speaker 4>one point seven billion dollars, despite the fact that people

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<v Speaker 4>have said that the investors are going to get paid

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<v Speaker 4>back most of them. He said something that I thought

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<v Speaker 4>was kind of it was chilling. So the defense was saying, look,

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<v Speaker 4>let him out early. He could be like a Michael Milket.

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<v Speaker 4>He can come back because he wants to do good

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<v Speaker 4>in the world. He has this ability. And the judge

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<v Speaker 4>said that there's a risk that this man will be

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<v Speaker 4>in a position to do something very bad in the future,

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<v Speaker 4>and it's not a trivial risk. Part of my sentence

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<v Speaker 4>will be for the purpose of disabling him to the

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<v Speaker 4>extent that it can be appropriately done to him for

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<v Speaker 4>a significant period of time. So the judge just didn't

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<v Speaker 4>buy his good in tensions, he said his intentions were

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<v Speaker 4>to gain power.

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<v Speaker 2>But on the flip side, I mean, he wasn't sentenced

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<v Speaker 2>one hundred and fifty years, so like he will still

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<v Speaker 2>have a life when he gets out right. Just if

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<v Speaker 2>you're just joining us now, Sam bankmund free to send

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<v Speaker 2>us twenty five years in prison he will also be

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<v Speaker 2>ordered to forfeit more than eleven billion dollars. So presumably,

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<v Speaker 2>like do you serve that whole twenty five years?

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<v Speaker 4>You serve eighty five percent of the time, and no

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<v Speaker 4>one know the request from the Bureau of Probation for

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<v Speaker 4>one hundred years was ludicrous. No one would be sentenced

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<v Speaker 4>to that. I mean, think about Bernie Madoff. That's like

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<v Speaker 4>a worst scam that you can think of. So he

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<v Speaker 4>was like, he's like the high end of the scale.

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<v Speaker 4>The government was asking for forty to fifty years. That's

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<v Speaker 4>also very high. I mean, you know, think about what

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<v Speaker 4>happened here. But I think the judge is also trying

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<v Speaker 4>to send a message to you know, this has been

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<v Speaker 4>called the greatest financial fraud in the US history by

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<v Speaker 4>the US Attorney for the Southern District of New York.

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<v Speaker 4>So the judge is trying to send a message. But

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<v Speaker 4>this judge has been so tough through the entire trial.

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<v Speaker 4>If you remember, before bankmin Free testified, he had him

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<v Speaker 4>on the stand for three hours outside the presence of

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<v Speaker 4>the jury. He denied almost all of the requests that

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<v Speaker 4>the defense made for motions to introduce different defenses that

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<v Speaker 4>he wanted to present to the jury different expert witnesses.

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<v Speaker 4>So he's been tough on him since the very beginning.

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<v Speaker 4>But I you know, I thought he should get ten years,

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<v Speaker 4>so maybe he'll get twenty years. In point of fact,

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<v Speaker 4>he got twenty five years.

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<v Speaker 1>Interesting, do we know what type of facility he will

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<v Speaker 1>serve this time in? Is this a you know, minimum maximum?

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<v Speaker 5>What did they say?

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<v Speaker 4>I mean, really he's a white collar criminal. There's all

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<v Speaker 4>kinds of evidence that in when he's been in prison,

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<v Speaker 4>and he's been in rikers, that he's been helping to

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<v Speaker 4>teach some of the inmates to help with their gged diplomas,

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<v Speaker 4>and that his one of his roommates show he said

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<v Speaker 4>his salemates is a former police officer, and he said that,

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<v Speaker 4>you know, he really is getting along well in prison

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<v Speaker 4>and he's trying to make you do the best he can.

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<v Speaker 4>I don't this will be up to the Bureau of Prisons.

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<v Speaker 4>It's not gonna be up to the judge where he goes.

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<v Speaker 4>So they're going to do a report after this and determine.

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<v Speaker 4>And also I think he might go to a facility

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<v Speaker 4>in California so he could be near his family.

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<v Speaker 2>And just to reiterate if you're just joining us FTX

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<v Speaker 2>CO finder Sam Beckmanfried has now been sentenced so twenty

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<v Speaker 2>five years in prison for stealing billions of dollars from customers,

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<v Speaker 2>marking the final chapter in this case that has just

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<v Speaker 2>captivated pretty much everybody. He also has been ordered to

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<v Speaker 2>forfeit eleven billion dollars. What happens now? Is there any

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<v Speaker 2>other thing? Appeal convo? What happens next?

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<v Speaker 4>There is an appeal? I mean the defense is going

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<v Speaker 4>to appeal this. Appeals are very hard in criminal cases

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<v Speaker 4>and a lot of the decisions that the judge made

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<v Speaker 4>are considered within a trial judge's discretion, so it's a

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<v Speaker 4>difficult appeal. But yes, they were an appeal. He's hired

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<v Speaker 4>new lawyers. He changed his lawyers from the trial, so

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<v Speaker 4>he has representing him now more Ark muc Casey, who's

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<v Speaker 4>a very well known criminal defense attorney. He represented Trevor

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<v Speaker 4>Milton and got him a sentence of four years when

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<v Speaker 4>the prosecution wanted eleven years, so he.

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<v Speaker 1>Didn't So would he be appealing the verdict or just

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<v Speaker 1>the sentence?

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<v Speaker 4>The verdict? He will be appealing the verdict. What happened

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<v Speaker 4>at trial? You know the charges, the different for example,

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<v Speaker 4>what I just said, the judge didn't allow him all

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<v Speaker 4>these different expert witnesses that he wanted to testify to

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<v Speaker 4>present defenses, and the judge cut all that off. So

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<v Speaker 4>that will be I think the basis of the appeal

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<v Speaker 4>and you know, whatever the defense can can drag up.

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<v Speaker 2>I've also seen things like people are getting their money back,

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<v Speaker 2>the recovery rate is going to be Okay, he has autism,

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<v Speaker 2>he can't like that should be reduced, like does that

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<v Speaker 2>hold water? Like what is that?

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<v Speaker 4>Well, that's what the defense argued. The judge said, he

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<v Speaker 4>is a hot, very high achieving, autistic person, which means

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<v Speaker 4>he's capable of huge accomplishments. But then he turned that

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<v Speaker 4>around and said, wait, we have to be careful of

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<v Speaker 4>those accomplishments. He's a dangerous person. So that was almost

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<v Speaker 4>used against him by the judge. But yeah, there was

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<v Speaker 4>there were There was letters to the judge about his

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<v Speaker 4>autism and how that makes him socially awkward. They had

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<v Speaker 4>experts testifying about it, but the judge didn't buy it.

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<v Speaker 4>The defense also brought up the fact that most of

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<v Speaker 4>the investors, it looks like, are going to be made whole.

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<v Speaker 6>The judge didn't buy that either.

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<v Speaker 7>Despite the judge said that, he said that he's really

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<v Speaker 7>let me see, just that he found that the loss

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<v Speaker 7>to investors was one point seven billion and that the

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<v Speaker 7>fact that they'll be paid in full is misleading, it's

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<v Speaker 7>logically flawed.

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<v Speaker 4>And it's speculative. So everything that the defense put out there,

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<v Speaker 4>the judge just rejected.

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<v Speaker 1>So next steps here think he goes back to this

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<v Speaker 1>this peditentiary, I guess the detention center in Brooklyn.

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<v Speaker 4>I think he will go back there for a bit

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<v Speaker 4>until they decide, you know, where he is going to

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<v Speaker 4>be in prison and where he's going to serve his sentence.

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<v Speaker 4>And in the meantime, you know, it takes a while

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<v Speaker 4>for an appeal to go through. You have to get

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<v Speaker 4>all the documents and the trial transcripts and everything, so

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<v Speaker 4>that's going to be a while. Then the next thing

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<v Speaker 4>we'll hear about probably is where he's going to spend

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<v Speaker 4>his sentence and also you know what the appeal is

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<v Speaker 4>going to be about. That'll probably be you know, months

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<v Speaker 4>and months, maybe a year down the road.

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<v Speaker 1>Hey joining us also in our Bloomberg interarctor broker Stugo

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<v Speaker 1>Peter Jeffrey joined us Bloomberg Legal editor Jeffrey, what's your

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<v Speaker 1>takeaway from the sentence of twenty five years?

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<v Speaker 5>Well, you could tell, as the judge prepared delivered his

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<v Speaker 5>remarks before pronouncing the sentence, that it was going to

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<v Speaker 5>be very stiff, nothing like the six and a half

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<v Speaker 5>that the defense asked for, but not at the range

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<v Speaker 5>of the forty to fifty the government wanted. It was

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<v Speaker 5>sort of right in the middle. The judge hit him

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<v Speaker 5>with three hundred months. We did some quick calculations. It

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<v Speaker 5>was twenty five years, and it is just what the

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<v Speaker 5>judge and had to do. It's a stiff deterrent to

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<v Speaker 5>anybody who plays outside the lines in a sensitive area

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<v Speaker 5>like crypto. And as you were saying, the judge just

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<v Speaker 5>had no patience for the nonetheless excellent defense. A sentencing

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<v Speaker 5>statement that his lawyer mckayzy made it was it was

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<v Speaker 5>one of the best we'd heard. And yet the judge

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<v Speaker 5>thought this won't fly. Look at what he did, and

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<v Speaker 5>he didn't believe.

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<v Speaker 4>He said that he was sorry, but the judge said,

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<v Speaker 4>he has no apparent remorse, so he didn't believe the

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<v Speaker 4>words that were coming out of SBF's mouth that this,

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<v Speaker 4>I mean he made a statement, a twenty minute statement

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<v Speaker 4>in which he said that, you know, he was sorry

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<v Speaker 4>for what happened. I'm sorry about what happened. It haunts

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<v Speaker 4>me every day. I made a series of bad decisions.

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<v Speaker 4>They weren't selfish decisions, they weren't selfless decisions. They were

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<v Speaker 4>bad decisions. And the judge just, yeah, didn't believe anything.

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<v Speaker 5>And maybe most strikingly to me, the judge said, I've

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<v Speaker 5>got to give you a sentence that is going to

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<v Speaker 5>make sure you are not out on the street doing

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<v Speaker 5>this again anytime soon. So we were all sitting around thinking, well,

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<v Speaker 5>he's thirty two. That means he's getting at least twenty

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<v Speaker 5>and you know, it's not a violent crime, but the

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<v Speaker 5>judge was talking in terms almost in terms of the

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<v Speaker 5>violence bankman Free did to investors, customers, employees. Yeah.

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<v Speaker 2>Yeah, if you're just joining us, we just want to

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<v Speaker 2>update you on the news. FTX co founder Sam bank

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<v Speaker 2>And Freed has been sentenced to twenty five years in

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<v Speaker 2>prison for stealing billions of dollars from customers. He's also

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<v Speaker 2>been ordered to remit about eleven billion dollars. As we

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<v Speaker 2>just did some quick math there, he'll be fifty seven now,

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<v Speaker 2>when he gets out of prison. Joining us here is

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<v Speaker 2>Peter Jeffrey, Bloomberg Legal editor joins us in June Grasso,

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<v Speaker 2>a Bloomberg legal analyst. Peter, can you give us some

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<v Speaker 2>just perspective and background here on this kind of sentencing,

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<v Speaker 2>these kind of cases and kind of how we get here?

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<v Speaker 5>Well, just thinking about it, Elizabeth Holmes got a little

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<v Speaker 5>over eleven years for the Pharaohnose froue.

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<v Speaker 2>Peter, gonna need you talking to them mind, Oh, I'm.

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<v Speaker 5>Sorry, Elizabeth Holmes got it. That would help, right, got

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<v Speaker 5>more than eleven years for the Pharohnise fraud. Bernie made

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<v Speaker 5>off one hundred and fifty. And so this one is

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<v Speaker 5>a stiff sentence that, as the judge suggested, I mean,

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<v Speaker 5>you know, we did the math, like like you said,

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<v Speaker 5>he'll be fifty seven when he gets out.

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<v Speaker 7>And yeah, yeah, Paul is a prefect.

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<v Speaker 5>But right, if you're looking for a sentence that will

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<v Speaker 5>stop somebody from pursuing this kind of fraud again, a

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<v Speaker 5>quarter of a century will do it, all.

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<v Speaker 1>Right, So Juna, give us a sense of timing. Just

0:11:34.400 --> 0:11:35.160
<v Speaker 1>as to the.

0:11:35.120 --> 0:11:38.439
<v Speaker 4>Appeal, it's hard to it's hard to say how long

0:11:38.440 --> 0:11:41.080
<v Speaker 4>the appeal will take. Because they have to. It's up

0:11:41.120 --> 0:11:44.120
<v Speaker 4>to the defense to prepare the papers and to But

0:11:44.160 --> 0:11:46.200
<v Speaker 4>I mean, I think it'll be months, maybe, I mean

0:11:46.240 --> 0:11:46.559
<v Speaker 4>even a.

0:11:46.520 --> 0:11:46.920
<v Speaker 7>Year, Peter.

0:11:46.960 --> 0:11:47.520
<v Speaker 5>I think it could be.

0:11:47.720 --> 0:11:50.520
<v Speaker 4>It would be a year. Of course, they'll be trying

0:11:50.559 --> 0:11:53.319
<v Speaker 4>to put it in faster, but and then the prosecution

0:11:53.400 --> 0:11:56.520
<v Speaker 4>gets a chance to respond. It's a long, long process.

0:11:56.640 --> 0:11:59.120
<v Speaker 4>He'll have served years before we hear about what the

0:11:59.400 --> 0:12:03.520
<v Speaker 4>appeal result is. And I mean, I don't think I mean,

0:12:03.520 --> 0:12:05.560
<v Speaker 4>I think it's going to be a hard appeal to make.

0:12:05.920 --> 0:12:08.600
<v Speaker 2>Well, I mean to the eleven billion dollars. Also, June, like,

0:12:09.080 --> 0:12:09.719
<v Speaker 2>where is that?

0:12:09.880 --> 0:12:12.000
<v Speaker 4>Like, I don't know where that is.

0:12:12.960 --> 0:12:14.360
<v Speaker 5>I don't think he has eleven billion.

0:12:14.440 --> 0:12:16.440
<v Speaker 4>He's not supposed to have eleven billion at this point.

0:12:16.480 --> 0:12:18.240
<v Speaker 1>All Right, we're going to continue this conversation, but we're

0:12:18.280 --> 0:12:19.880
<v Speaker 1>going to hand that off to our good friend Joe

0:12:19.920 --> 0:12:22.880
<v Speaker 1>Matthew Balance of power. Joe's down in Washington, DC, and

0:12:22.960 --> 0:12:26.880
<v Speaker 1>we're going to keep June in Peter as well. So Joe,

0:12:27.040 --> 0:12:29.600
<v Speaker 1>big news here coming out of Lower Manhattan.

0:12:30.280 --> 0:12:31.360
<v Speaker 8>That's for sure, Paul.

0:12:31.440 --> 0:12:31.760
<v Speaker 4>Thanks.

0:12:32.240 --> 0:12:34.520
<v Speaker 8>Of course, the story that's resonated here in Washington for

0:12:34.559 --> 0:12:36.600
<v Speaker 8>a lot of different reasons and continues to when we

0:12:36.600 --> 0:12:40.040
<v Speaker 8>talk about crypto on Capitol Hill, the idea of regulating this,

0:12:40.200 --> 0:12:44.320
<v Speaker 8>the stand that lawmakers take on this issue. I'm glad

0:12:44.320 --> 0:12:46.600
<v Speaker 8>to have Kaylee Lines at my side today. Kaylee has

0:12:46.600 --> 0:12:49.440
<v Speaker 8>actually been covering this SBF story from the very beginning,

0:12:49.480 --> 0:12:52.360
<v Speaker 8>remembering she was hosting our Crypto Show when that began,

0:12:52.440 --> 0:12:55.600
<v Speaker 8>and has since come down to Washington to cover financial

0:12:55.600 --> 0:12:59.280
<v Speaker 8>regulations and of course crypto. Kaylee, this this is a

0:12:59.440 --> 0:13:01.920
<v Speaker 8>Washington's in a lot of ways that people might not

0:13:01.960 --> 0:13:05.600
<v Speaker 8>see on the surface, knowing millions of dollars were donated

0:13:05.640 --> 0:13:09.240
<v Speaker 8>to candidates in the way that SBF tried to influence

0:13:09.280 --> 0:13:09.960
<v Speaker 8>a lot of races.

0:13:10.120 --> 0:13:13.840
<v Speaker 6>Yeah, Sam Bankminfreed was incredibly politically active. He made donations

0:13:13.840 --> 0:13:15.880
<v Speaker 6>on a bipartisan basis, but as you say, it was

0:13:16.240 --> 0:13:18.160
<v Speaker 6>a significant amount of money, and he spent a lot

0:13:18.160 --> 0:13:21.040
<v Speaker 6>of time physically here in Washington actually lobbying, not just

0:13:21.360 --> 0:13:24.280
<v Speaker 6>on behalf of FTX, but he really became kind of

0:13:24.280 --> 0:13:27.760
<v Speaker 6>a poster child and spokesperson for the industry, really advocating

0:13:27.760 --> 0:13:30.560
<v Speaker 6>for crypto as a whole legislatively on the Hill, and

0:13:30.640 --> 0:13:33.720
<v Speaker 6>a lot of lawmakers were quite burned ultimately when it

0:13:33.800 --> 0:13:37.439
<v Speaker 6>turned out that FTX ultimately collapsed, and that has certainly

0:13:37.480 --> 0:13:39.839
<v Speaker 6>continued to resonate as we talk about the difficulty of

0:13:39.880 --> 0:13:42.880
<v Speaker 6>actually getting crypto legislation through the industry has had to

0:13:42.920 --> 0:13:45.200
<v Speaker 6>work a lot harder on their lobbying efforts to try

0:13:45.240 --> 0:13:49.360
<v Speaker 6>to delineate FTX from everything else in the industry, considering

0:13:49.440 --> 0:13:52.760
<v Speaker 6>FTX was in many ways a centralized exchange, not necessarily

0:13:52.760 --> 0:13:55.480
<v Speaker 6>the same decentralized model has a lot of this, but

0:13:55.679 --> 0:13:59.760
<v Speaker 6>obviously this to a certain point will bring some closure

0:13:59.800 --> 0:14:03.240
<v Speaker 6>to this. Sam Bankman freed specific case, keeping in mind

0:14:03.320 --> 0:14:07.360
<v Speaker 6>that he was initially charged with violating campaign finance laws.

0:14:07.360 --> 0:14:09.680
<v Speaker 6>They ultimately dropped the charge, so of the seven charges

0:14:09.720 --> 0:14:14.120
<v Speaker 6>he was actually convicted of back in November, including conspiracy

0:14:14.200 --> 0:14:18.040
<v Speaker 6>to commit fraud, et cetera, campaign finance violations were not

0:14:18.080 --> 0:14:20.200
<v Speaker 6>in there. So this sentencing has nothing to do with

0:14:20.240 --> 0:14:22.760
<v Speaker 6>his political activity, even if it's still had it.

0:14:22.760 --> 0:14:25.080
<v Speaker 8>That's a really important point though, certainly for the people

0:14:25.120 --> 0:14:27.840
<v Speaker 8>who are interested in politics and are used to what

0:14:27.880 --> 0:14:31.760
<v Speaker 8>we talk about on this program. Had that charge stayed

0:14:31.800 --> 0:14:33.920
<v Speaker 8>in place, that could have outed a lot of people

0:14:33.920 --> 0:14:34.920
<v Speaker 8>in Washington.

0:14:34.520 --> 0:14:38.200
<v Speaker 6>And certainly, yeah, it could have brought great politically political

0:14:38.200 --> 0:14:41.240
<v Speaker 6>difficulty for many individuals, not just for Sam Bankman Free,

0:14:41.240 --> 0:14:44.040
<v Speaker 6>because theoretically, had that been added, you could be talking

0:14:44.040 --> 0:14:47.520
<v Speaker 6>about a sentence beyond twenty five years today. That said, still,

0:14:47.520 --> 0:14:50.840
<v Speaker 6>this twenty five year sentence is significantly lower than what

0:14:50.880 --> 0:14:53.920
<v Speaker 6>prosecutors were asking for. Obviously, they were pitching for forty

0:14:53.960 --> 0:14:56.280
<v Speaker 6>to fifty years because of the scale of this fraud

0:14:56.720 --> 0:14:59.120
<v Speaker 6>that they were describing, one of the largest and modern

0:14:59.120 --> 0:15:02.640
<v Speaker 6>American financial history, with over a million victims, obviously ten

0:15:02.640 --> 0:15:06.480
<v Speaker 6>billion dollars ultimately in terms of the size of the fraud.

0:15:06.960 --> 0:15:08.360
<v Speaker 6>But we do have to keep in mind here that

0:15:08.400 --> 0:15:11.640
<v Speaker 6>Sam bankman Fried is thirty two years old, as Alex

0:15:11.640 --> 0:15:13.840
<v Speaker 6>and Paul and June were just discussing, So this is

0:15:13.880 --> 0:15:16.600
<v Speaker 6>going to take him well into late middle age ultimately.

0:15:16.600 --> 0:15:19.720
<v Speaker 6>If this sentence stands, obviously there will be an appeal process,

0:15:19.720 --> 0:15:21.080
<v Speaker 6>but who knows how that will shake down.

0:15:21.160 --> 0:15:24.240
<v Speaker 8>It's just amazing when you think about just the way

0:15:24.320 --> 0:15:27.920
<v Speaker 8>human nature is at play in stories like these, Considering

0:15:28.040 --> 0:15:30.760
<v Speaker 8>the paradise he was living in, he had it made.

0:15:30.960 --> 0:15:33.640
<v Speaker 8>He was in the Bahamas living the life he dreamt of.

0:15:34.440 --> 0:15:36.680
<v Speaker 8>He's been since living in Riker's Island.

0:15:36.960 --> 0:15:39.040
<v Speaker 6>Yeah, I mean, he was a billionaire many times over,

0:15:39.080 --> 0:15:40.600
<v Speaker 6>and now of course is part of this. He also

0:15:40.640 --> 0:15:42.760
<v Speaker 6>has not just been sentenced to twenty five years in prison,

0:15:42.800 --> 0:15:46.400
<v Speaker 6>but forfeiting eleven billion dollars and unclear where that eleven

0:15:46.400 --> 0:15:49.600
<v Speaker 6>billion dollars comes from. All of his wealth was tied

0:15:49.680 --> 0:15:51.880
<v Speaker 6>up in FTX, which is now a bankrupt and of

0:15:51.880 --> 0:15:54.520
<v Speaker 6>course everything that can be salvage from that bankruptcy proje

0:15:54.560 --> 0:15:57.080
<v Speaker 6>that process is going to be distributed to the customers

0:15:57.120 --> 0:15:59.760
<v Speaker 6>and users who had money lost in this that, if

0:15:59.760 --> 0:16:02.160
<v Speaker 6>any thing, might be. One of the more redeeming aspects

0:16:02.200 --> 0:16:04.440
<v Speaker 6>of the argument that he and his legal team were

0:16:04.480 --> 0:16:06.680
<v Speaker 6>able to make to Judge Kaplan was that a lot

0:16:06.680 --> 0:16:08.960
<v Speaker 6>of these people will ultimately get most of their money

0:16:08.960 --> 0:16:12.680
<v Speaker 6>back throughout that bankruptcy prodcast process, and so that may

0:16:12.720 --> 0:16:15.960
<v Speaker 6>have helped him here. But yeah, the journey of Sam

0:16:16.000 --> 0:16:19.840
<v Speaker 6>Bankman freed from this meteoric rise to one of the

0:16:19.880 --> 0:16:22.640
<v Speaker 6>most well known individuals hanging out with Jaseel Bunchin and

0:16:22.680 --> 0:16:25.760
<v Speaker 6>Tom Brady and yeah, right, incredibly popular, certainly a well

0:16:25.800 --> 0:16:27.880
<v Speaker 6>known presence here in Washington, to now someone who is

0:16:27.920 --> 0:16:30.440
<v Speaker 6>going to be in prison for a very large chunk

0:16:30.880 --> 0:16:33.600
<v Speaker 6>of his life. It's a remarkable.

0:16:33.120 --> 0:16:35.760
<v Speaker 8>Story spending time with Kaylee Lyons here a little earlier

0:16:35.760 --> 0:16:38.480
<v Speaker 8>than usual on balance of power. If you're just joining

0:16:38.480 --> 0:16:41.840
<v Speaker 8>a sentencing day for SBF and it is twenty five

0:16:41.920 --> 0:16:45.400
<v Speaker 8>years in prison, I think June Grosso was suggesting that

0:16:45.400 --> 0:16:47.880
<v Speaker 8>that could be knocked down. But that's the headline right now.

0:16:47.920 --> 0:16:50.960
<v Speaker 8>And of course, to Kaylee's point, they were asking for

0:16:50.960 --> 0:16:53.000
<v Speaker 8>forty to fifty years. So just for a little bit

0:16:53.040 --> 0:16:57.960
<v Speaker 8>of perspective on this, you've been saying, of course asking questions, Kaylee,

0:16:58.000 --> 0:17:01.640
<v Speaker 8>of lawmakers and regulators about cryptos. You moved to Washington.

0:17:01.680 --> 0:17:03.960
<v Speaker 8>This is colored that debate in a lot of ways,

0:17:04.000 --> 0:17:05.960
<v Speaker 8>where lawmakers feel free to say, you know what, this

0:17:06.680 --> 0:17:09.480
<v Speaker 8>is a home for criminal activity, this is not a

0:17:09.640 --> 0:17:15.399
<v Speaker 8>serious investment. Before this happened, there was more momentum, it seemed,

0:17:15.400 --> 0:17:18.240
<v Speaker 8>on some of these issues. Where's any of this going now?

0:17:18.400 --> 0:17:20.439
<v Speaker 6>Well, it's a great question. Where it's going in the

0:17:20.480 --> 0:17:23.240
<v Speaker 6>House is probably very different than ultimately the question of

0:17:23.240 --> 0:17:25.879
<v Speaker 6>whether it will pass the Senate or become law, because

0:17:25.880 --> 0:17:28.359
<v Speaker 6>in the House you do have much more advocacy for

0:17:28.440 --> 0:17:31.080
<v Speaker 6>the crypto industry in some of those lawmakers, including the chair,

0:17:31.400 --> 0:17:34.240
<v Speaker 6>at least for now, with the Financial Services Committee, Patrick McHenry,

0:17:34.320 --> 0:17:38.159
<v Speaker 6>and that committee has advanced multiple pieces of legislation that

0:17:38.200 --> 0:17:41.320
<v Speaker 6>would in some ways perhaps legitimize the industry more by

0:17:41.320 --> 0:17:44.600
<v Speaker 6>giving them the regulatory clarity they've been asking for, delineating

0:17:45.119 --> 0:17:48.640
<v Speaker 6>what the CFTC or the SEC would have control over,

0:17:48.680 --> 0:17:51.120
<v Speaker 6>including things to stable coins. Not all of this, of course,

0:17:51.160 --> 0:17:53.960
<v Speaker 6>related to the business that FTX was conducting, but it

0:17:54.000 --> 0:17:56.520
<v Speaker 6>has been used as an example for the counter arguments.

0:17:56.560 --> 0:18:00.080
<v Speaker 6>Those who are more cryptoskeptical aren't in the majority in

0:18:00.080 --> 0:18:03.320
<v Speaker 6>the House, but they are in the Senate. Shared Brown Is,

0:18:03.520 --> 0:18:05.760
<v Speaker 6>obviously the head of the Senate Banking Committee, has been

0:18:05.880 --> 0:18:08.280
<v Speaker 6>very reluctant to talk about any of this kind of

0:18:08.320 --> 0:18:11.359
<v Speaker 6>legislation in any way that isn't more critical and skeptical

0:18:11.400 --> 0:18:13.760
<v Speaker 6>of the industry. And he is facing a challenger of

0:18:13.800 --> 0:18:18.080
<v Speaker 6>a pro crypto advocate in his Senate race in Ohio

0:18:18.160 --> 0:18:21.760
<v Speaker 6>in November, Bernie Marino. So you're still seeing the politics

0:18:21.800 --> 0:18:24.040
<v Speaker 6>around this industry playing out, and that goes well beyond

0:18:24.119 --> 0:18:26.040
<v Speaker 6>just the legacy of zam Bankman.

0:18:25.800 --> 0:18:29.360
<v Speaker 8>Freed got you. June Grosso is standing by a host

0:18:29.400 --> 0:18:31.960
<v Speaker 8>of Bloomberg law in New York. Before we moved to

0:18:31.960 --> 0:18:35.760
<v Speaker 8>a conversation with Governor Glegg ned Lamont of Connecticut. I

0:18:35.800 --> 0:18:38.639
<v Speaker 8>just want to bring June in on this specific to

0:18:38.720 --> 0:18:41.160
<v Speaker 8>the sentence. June, what options does he have now you've

0:18:41.200 --> 0:18:43.280
<v Speaker 8>referred to an appeal. What happens next?

0:18:43.800 --> 0:18:46.280
<v Speaker 4>Well, he'll have to serve eighty five percent of that

0:18:46.400 --> 0:18:49.800
<v Speaker 4>sentence unless he wins on appeal, and of course the

0:18:49.840 --> 0:18:52.960
<v Speaker 4>defense is going to appeal. He has changed his lawyers

0:18:53.000 --> 0:18:56.760
<v Speaker 4>since the trial. He's hired Mark Mukasey, very famous, well

0:18:56.800 --> 0:19:00.760
<v Speaker 4>known former pro federal prosecutor in New York. He represented

0:19:00.800 --> 0:19:04.000
<v Speaker 4>Trevor Milton and did much better on the sentence. Treveror

0:19:04.040 --> 0:19:07.239
<v Speaker 4>Milton got four years as opposed to the eleven that

0:19:07.320 --> 0:19:10.680
<v Speaker 4>the prosecution wanted. So the next thing is an appeal

0:19:10.840 --> 0:19:14.000
<v Speaker 4>and they'll go back through the trial there and find

0:19:14.200 --> 0:19:17.760
<v Speaker 4>what they consider to be legal errors, and probably a

0:19:17.760 --> 0:19:20.399
<v Speaker 4>lot of that will be some of the decisions that

0:19:20.480 --> 0:19:25.520
<v Speaker 4>the judge made prior to trial. Even that limited sharply

0:19:25.600 --> 0:19:29.560
<v Speaker 4>limited the defenses that Sam bankmin Freed could assert a trial,

0:19:29.640 --> 0:19:33.000
<v Speaker 4>limited the expert witnesses he wanted to call. He really

0:19:33.080 --> 0:19:36.040
<v Speaker 4>limited his case to a great extent. So I think

0:19:36.080 --> 0:19:38.520
<v Speaker 4>that will be the basis of the appeal. It will

0:19:38.520 --> 0:19:41.720
<v Speaker 4>be probably years before we know what you know how

0:19:41.760 --> 0:19:43.919
<v Speaker 4>that appeal turns out, because it takes quite a bit

0:19:43.960 --> 0:19:46.560
<v Speaker 4>of time to file the papers and have the responses.

0:19:47.680 --> 0:19:48.520
<v Speaker 4>That's where we stand.