Sam Bankman-Fried should serve 40 to 50 years in prison, prosecutors say
Federal prosecutors said Friday that Sam Bankman-Fried, the disgraced cryptocurrency magnate, should receive a prison sentence of 40 to 50 years for his fraud conviction.
Prosecutors outlined the sentencing recommendation in a filing in U.S. District Court in Manhattan. Mr. Bankman-Fried’s sentencing hearing is scheduled for March 28, during which Judge Lewis A. Kaplan will decide his fate. He faces a maximum possible sentence of 110 years.
“Justice requires that he receive a prison sentence commensurate with the extraordinary magnitude of his crimes,” prosecutors said in a 116-page sentencing memo to the judge.
In a separate filing last month, lawyers for 32-year-old Bankman-Fried argued he should receive a sentence of no more than six and a half years.
A spokesman for Mr Bankman-Fried declined to comment.
Just 18 months ago, Mr. Bankman-Fried was a high-flying crypto magnate, running the cryptocurrency exchange FTX, a $40 billion business empire. But then FTX collapsed virtually overnight, putting him in the crosshairs of law enforcement.
In November, a federal jury in Manhattan convicted Mr. Bankman-Fried of stealing $8 billion from FTX customers to finance political contributions, investments in other companies and lavish real estate purchases.
The implosion of FTX and the subsequent arrest and conviction of Mr Bankman-Fried were seen as an all-time low for the loosely regulated crypto world.
“The crypto industry may be new,” Damian Williams, the U.S. attorney for the Southern District of New York, said after the verdict, “but this kind of fraud, this kind of corruption is as old as time.”
Since then, the crypto industry appears to have put Mr. Bankman-Fried’s crimes in the rearview mirror. As he prepares to be sentenced, the prices of most digital assets have soared, with Bitcoin hitting an all-time high this month.
Mr. Bankman-Fried could receive a prison sentence that would amount to life in prison. According to court records, a probation officer recommended a 100-year prison sentence, just 10 years less than the maximum. In last month’s filing, Mr. Bankman-Fried’s lawyers called that recommendation “barbaric” and “grotesque.”
Marc Mukasey, the attorney who hired Bankman-Fried to prepare the sentencing, argued in his legal filing that a 100-year prison sentence would be reminiscent of the 150 years handed down by Bernard Madoff, who pleaded guilty in 2009 to running of one of the criminal cases. biggest Ponzi schemes in history. Any comparison between the two men is inappropriate, Mr. Mukasey said, given “the duration and the dollars” involved in Mr. Madoff’s crimes — a two-decade fraud that racked up $64 billion in paper losses.
Mr. Mukasey also pointed out that it took a court-appointed trustee more than 15 years to return about $14 billion to Mr. Madoff’s investors. By contrast, the bankruptcy lawyers overseeing FTX’s resolution have suggested that customers of the failed Bankman-Fried exchange will likely get all their money back within a relatively quick timeline.
Judges are not required to follow federal sentencing guidelines. And in imposing a sentence, Judge Kaplan may consider a range of factors, including Mr Bankman-Fried’s age, the fact that he is a first-time offender and the possibility that he will be rehabilitated.
But one factor that could work against Mr Bankman-Fried is that he chose to testify at his trial and sometimes appeared evasive during cross-examination. If Judge Kaplan concludes that Mr. Bankman-Fried has given false testimony, he may take this into account when determining the sentence.