FTX’s Sam Bankman-Fried should get up to 50 years in prison, US prosecutors say
- The sentence is necessary for the ‘historic’ fraud involving more than 1 million victims and losses of more than US$10 billion, they said in a court filing
- Prosecutors said Bankman-Fried showed ‘unmatched greed and hubris’ and refuses to admit what he did was wrong, even after his conviction
Prosecutors said Sam Bankman-Fried should get as much as 50 years behind bars for his role in the collapse of his FTX cryptocurrency exchange in “what is likely the largest fraud of the last decade”.
A sentence of ranging from 40 to 50 years is necessary for Bankman-Fried’s “historic” crime involving more than 1 million victims and losses of more than US$10 billion, prosecutors said Friday in a court filing. The request is far less than the 100 years recommended in US criminal sentencing guidelines, but much more than the 6½ years his lawyers suggested.
“In every part of his business, and with respect to each crime committed, the defendant demonstrated a brazen disrespect for the rule of law,” prosecutors said in the filing. “He understood the rules, but decided they did not apply to him.”
US District Judge Lewis A. Kaplan in New York is scheduled to sentence the 32-year-old on March 28. With such a wide disparity in the recommendations, the judge’s decision could be a bellwether for other cryptocurrency executives who defrauded investors or mismanaged client funds.
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FTX crypto exchange founder Sam Bankman-Fried convicted by US court on fraud charges
A jury in Manhattan convicted Bankman-Fried in November of seven charges, including wire fraud and conspiracy.
Prosecutors said he directed the transfer of FTX customer money into Alameda Research, an affiliated hedge fund, for risky investments, political donations and expensive real estate before both companies collapsed into bankruptcy in 2022. Before then, FTX was valued at US$32 billion.
During the trial, several close colleagues and friends at FTX and Alameda testified against him, some in hopes of lenient sentencing for their own admitted crimes.
A lawyer for Bankman-Fried could not be immediately reached to comment.
Prosecutors said on Friday that he showed “unmatched greed and hubris” and broke the law based on a “pernicious megalomania guided by the defendant’s own values and sense of superiority”.
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“Even now Bankman-Fried refuses to admit what he did was wrong,” prosecutors said.
When it comes to sentencing, it may not help that Bankman-Fried had a sometimes contentious relationship with the judge.
After Bankman-Fried was charged in December 2022, Kaplan allowed him to remain under house arrest at his parent’s home in Palo Alto, California, while awaiting trial.
But months later, he was found to be using encrypted messaging apps and VPN programs, which conflicted with the conditions of his release.
The judge ordered him locked up in August after the former cryptocurrency mogul leaked to The New York Times parts of a diary written by Caroline Ellison, the former chief executive officer of Alameda Research and Bankman-Fried’s ex-girlfriend. Ellison had pleaded guilty for related crimes and was cooperating with prosecutors.
At the time Kaplan called him “someone who has shown a willingness and a desire to risk crossing the line in an effort to get right up to it no matter where the line is”.
Near the end of his month-long trial, Bankman-Fried entered the witness box in his own defence, often appearing vague and evasive.
The judge frequently interrupted to caution him to answer the questions asked. Jurors took less than five hours to reject his claim that he was not aware of wrongdoing at FTX.
If Kaplan determines that Bankman-Fried lied on the stand, that could result in a harsher sentence.
Last month in a court filing, defence lawyers argued for a relatively lenient sentence, calling the potential for a 100-year term under the guidelines “grotesque” and “barbaric”.
They said that figure was based on a false view that Bankman-Fried’s conduct caused a US$10 billion loss.
