Accused of misappropriating $8 billion, Sam Bankman-Fried, former head of the now bankrupt cryptocurrency exchange FTX, faces a potential 40 to 50 years in prison, say prosecutors.
Last November, a jury found Bankman-Fried guilty on seven counts of fraud and conspiracy. According to the Manhattan Federal Prosecutors, FTX was entrusted with the savings of “thousands of average people,” including residents of war-torn and unstable countries. The prosecutors’ sentencing memorandum states, “Even now, Bankman-Fried refuses to acknowledge his actions as wrong. His life in recent years has been filled with unparalleled greed and arrogance, ambition and rationalization, a thirst for risk and constant gambling with other people’s money.” The prosecutors also demand confiscation of $11 billion to compensate losses incurred by FTX investors and creditors of the affiliate company, Alameda.
The defendant’s attorney, Marc Mukasey, argues a fair sentence would range from 5 years and 3 months to 6 years and 6 months. Mukasey insists that FTX customers will recover most of their money, and Bankman-Fried had no intention of misappropriating the funds. The defense team, which also includes Mark Botnick, will submit a response to the prosecutors’ memorandum next week. Federal Judge Lewis Kaplan, who plans to pronounce the sentence on March 28th, is expected to face an appeal from the defense.
The son of two Stanford Law School professors, Sam Bankman-Fried is a Massachusetts Institute of Technology graduate who amassed a $26 billion fortune in digital assets after working on Wall Street. His wealth dissipated following FTX’s bankruptcy in 2022. The prosecution points to his privileged upbringing and elite education as an aggravating circumstance, stating in the memorandum, “He knew what society considered illegal and unethical, but ignored it due to a destructive delusion of grandeur, guided by his own values and sense of superiority.”
According to the prosecutors, Bankman-Fried spent client funds on luxury real estate and donations to American politicians who might advocate for more favorable cryptocurrency laws. So far, 251 American political candidates and committees have returned $3.3 million in donations from Bankman-Fried, including Joe Biden’s presidential campaign and the Republican National Committee.
