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How long could Sam Bankman-Fried go to jail for? Crypto lawyers weigh in

“I think he’ll get the maximum sentence” — one lawyer predicts the former FTX CEO could look at life behind bars if convicted of all seven charges….

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5 months ago

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“I think he’ll get the maximum sentence” — one lawyer predicts the former FTX CEO could look at life behind bars if convicted of all seven charges.

FTX founder Sam “SBF” Bankman-Fried, once described as the “golden boy” of crypto, is set to stare down a jury next week for his role in the collapse of his $32-billion crypto exchange.

After a jury selection process on Oct. 3, the trial begins in earnest on Oct. 4, with Bankman-Fried facing seven charges. If found guilty on all counts, he faces a maximum sentence of 115 years in prison.

However, the judge won’t likely go easy on him, crypto lawyers told Cointelegraph.

In mid-November last year, Bankman-Fried suffered one of the most rapid and public reputational declines of all time when his crypto exchange and its sister hedge fund, Alameda Research, collapsed and filed for bankruptcy, leaving a $10-billion hole in its wake.

Life behind bars?

Now less than a week out from the trial, Michael Kanovitz, a partner at Loevy & Loevy law firm, told Cointelegraph that things don’t look particularly good for Bankman-Fried.

He predicts that if the government finds him guilty of committing fraud, he’s likely looking at spending the rest of his life behind bars.

“If he’s found guilty, I think he will get the maximum sentence.”

Kanovitz explained that courts look mainly at the severity of the crime and how the defendant behaved during the judicial process when handing down a sentence.

“If the government can prove he knowingly stole billions of dollars and destroyed documents to cover it up, that pushes the sentence toward the high end of the range,” he said.

Kanovitz also noted that courts reserve some discretion to be lenient during sentencing if the defendant “behaves themself” before the court. However, Kanovitz believes Bankman-Fried hasn’t been doing that.

“SBF hasn’t done himself any favors here, as the court already found cause to believe that he was tampering with witnesses.”

“That’s very bad. Also, there is not a lot of ‘mitigation’ going the other way. He did donate to charity, but they don’t give you credit for being charitable with other people’s money,” Kanovitz said.

Slightly less resolute than Kanovitz, Jeremy Hogan, a partner at Hogan & Hogan, told Cointelegraph that he predicts that, while Bankman-Fried may not get the maximum sentence, he’s almost certainly going to spend a considerable period in jail.

“SBF is going to prison for quite some time. But, I don’t know enough about it to get into details. Just a long time — more than 10 years.”

Breaking down the charges

Bankman-Fried will face a total of seven fraud charges. The burden of proof is carried by the government, which must prove beyond reasonable doubt that Bankman-Fried is guilty of the charges pressed against him, including:

  1. Committing wire fraud on FTX customers
  2. Conspiring to commit wire fraud on FTX customers
  3. Committing wire fraud on Alameda Research lenders
  4. Conspiring to commit wire fraud on Alameda Research lenders
  5. Conspiring to commit securities fraud against FTX investors
  6. Conspiring to commit [commodities?] fraud against FTX customers
  7. Conspiring to commit money laundering to hide the proceeds of wire fraud on FTX customers.

Of these charges, only two — committing wire fraud on FTX customers and Alameda Research lenders — are “substantive,” meaning that the prosecution must prove that Bankman-Fried committed them.

The remaining charges are “conspiracy” allegations, which mean that the prosecution will have to prove that Bankman-Fried planned to commit these crimes with at least one other person.

Kanovitz explained that government prosecutors are likely aware that they won’t be able to prove that Bankman-Fried was personally involved in every aspect of the FTX and Alameda violations, which is where the conspiracy charges come in.

However, if the prosecution can prove the conspiracy allegations, Bankman-Fried will be on the hook for the full brunt of the charges, he said.

“Whatever actions others took to achieve those illegal goals, the law treats it as if Bankman-Fried had done those things himself,” Kanovitz said.

SBF’s likely defense

Commercial litigator Joe Carlasare argues that Bankman-Fried’s lawyers are already running a “distraction and confusion playbook.”

“The defense will likely challenge the depiction of SBF as the central figure and instead portray him as a scapegoat, influenced by those around him who have already pleaded guilty.”

“I suspect his lawyers will highlight the quirky and eccentric aspects of SBF’s personality to depict him as easily influenced, immature and impressionable,” Carlasare added.

Similarly, Kanovitz said that the defense will seek to wrap SBF in a cloak of incompetence and uncertainty by claiming that the other major custodians were doing similar things to FTX and that rules governing crypto were so unclear that he couldn’t knowingly violate them.

“He’ll bring forward evidence that other major crypto custodians were doing essentially the same thing and so he thought it was ok, which is the legal equivalent of telling the teacher, ‘But CZ [Changpeng Zhao] was doing it, too!’”

Related: Sam Bankman-Fried’s political donations can be surfaced in trial, rules judge

Ultimately, however, Kanovitz predicts that these defenses will fall short, regardless of whether there are shadows of truth contained within them, saying:

“How are you going to convince a jury of regular people that a man who built a multibillion-dollar fortune for himself was merely a bumbler when it came to taking care of other people’s money?”

And finishing by adding:

“In that sense, he’ll be a victim of his own success.”

Deposit risk: What do crypto exchanges really do with your money?

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Homes listed for sale in early June sell for $7,700 more

New Zillow research suggests the spring home shopping season may see a second wave this summer if mortgage rates fall
The post Homes listed for sale in…

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March 11, 2024

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  • A Zillow analysis of 2023 home sales finds homes listed in the first two weeks of June sold for 2.3% more. 
  • The best time to list a home for sale is a month later than it was in 2019, likely driven by mortgage rates.
  • The best time to list can be as early as the second half of February in San Francisco, and as late as the first half of July in New York and Philadelphia. 

Spring home sellers looking to maximize their sale price may want to wait it out and list their home for sale in the first half of June. A new Zillow® analysis of 2023 sales found that homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home.  

The best time to list consistently had been early May in the years leading up to the pandemic. The shift to June suggests mortgage rates are strongly influencing demand on top of the usual seasonality that brings buyers to the market in the spring. This home-shopping season is poised to follow a similar pattern as that in 2023, with the potential for a second wave if the Federal Reserve lowers interest rates midyear or later. 

The 2.3% sale price premium registered last June followed the first spring in more than 15 years with mortgage rates over 6% on a 30-year fixed-rate loan. The high rates put home buyers on the back foot, and as rates continued upward through May, they were still reassessing and less likely to bid boldly. In June, however, rates pulled back a little from 6.79% to 6.67%, which likely presented an opportunity for determined buyers heading into summer. More buyers understood their market position and could afford to transact, boosting competition and sale prices.

The old logic was that sellers could earn a premium by listing in late spring, when search activity hit its peak. Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.

Mortgage rates have been impacting affordability and sale prices since they began rising rapidly two years ago. In 2022, sellers nationwide saw the highest sale premium when they listed their home in late March, right before rates barreled past 5% and continued climbing. 

Zillow’s research finds the best time to list can vary widely by metropolitan area. In 2023, it was as early as the second half of February in San Francisco, and as late as the first half of July in New York. Thirty of the top 35 largest metro areas saw for-sale listings command the highest sale prices between May and early July last year. 

Zillow also found a wide range in the sale price premiums associated with homes listed during those peak periods. At the hottest time of the year in San Jose, homes sold for 5.5% more, a $88,000 boost on a typical home. Meanwhile, homes in San Antonio sold for 1.9% more during that same time period.  

 

Metropolitan Area Best Time to List Price Premium Dollar Boost
United States First half of June 2.3% $7,700
New York, NY First half of July 2.4% $15,500
Los Angeles, CA First half of May 4.1% $39,300
Chicago, IL First half of June 2.8% $8,800
Dallas, TX First half of June 2.5% $9,200
Houston, TX Second half of April 2.0% $6,200
Washington, DC Second half of June 2.2% $12,700
Philadelphia, PA First half of July 2.4% $8,200
Miami, FL First half of June 2.3% $12,900
Atlanta, GA Second half of June 2.3% $8,700
Boston, MA Second half of May 3.5% $23,600
Phoenix, AZ First half of June 3.2% $14,700
San Francisco, CA Second half of February 4.2% $50,300
Riverside, CA First half of May 2.7% $15,600
Detroit, MI First half of July 3.3% $7,900
Seattle, WA First half of June 4.3% $31,500
Minneapolis, MN Second half of May 3.7% $13,400
San Diego, CA Second half of April 3.1% $29,600
Tampa, FL Second half of June 2.1% $8,000
Denver, CO Second half of May 2.9% $16,900
Baltimore, MD First half of July 2.2% $8,200
St. Louis, MO First half of June 2.9% $7,000
Orlando, FL First half of June 2.2% $8,700
Charlotte, NC Second half of May 3.0% $11,000
San Antonio, TX First half of June 1.9% $5,400
Portland, OR Second half of April 2.6% $14,300
Sacramento, CA First half of June 3.2% $17,900
Pittsburgh, PA Second half of June 2.3% $4,700
Cincinnati, OH Second half of April 2.7% $7,500
Austin, TX Second half of May 2.8% $12,600
Las Vegas, NV First half of June 3.4% $14,600
Kansas City, MO Second half of May 2.5% $7,300
Columbus, OH Second half of June 3.3% $10,400
Indianapolis, IN First half of July 3.0% $8,100
Cleveland, OH First half of July  3.4% $7,400
San Jose, CA First half of June 5.5% $88,400

 

The post Homes listed for sale in early June sell for $7,700 more appeared first on Zillow Research.

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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2 days ago

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March 9, 2024

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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Mortgage rates fall as labor market normalizes

Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

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3 days ago

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March 8, 2024

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Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.

The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250


Below is an explanation of how we got here with the labor market, which all started during COVID-19.

1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.

2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.

Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.  

2-US_Job_Quits_Rate-1-2

3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too

Total employment data

4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels. 




From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.

Here are the jobs that were created and lost in the previous month:

IMG_5092

In this jobs report, the unemployment rate for education levels looks like this:

  • Less than a high school diploma: 6.1%
  • High school graduate and no college: 4.2%
  • Some college or associate degree: 3.1%
  • Bachelor’s degree or higher: 2.2%
IMG_5093_320f22

Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.

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