Prosecutors recommend 40-50 years sentence for Bankman-Fried
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The prosecutors on Sam Bankman-Fried's case have set $11 billion in forfeiture to compensate FTX's investors and Alameda's lenders' losses.
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FTX founder Sam Bankman-Fried leaves Federal court, on Wednesday, July 26, 2023, in New York. (AP)
US Prosecutors said on March 15 that Sam Bankman-Fried, who was convicted of stealing $8 billion from customers of his now-bankrupt FTX cryptocurrency exchange, deserves a 40 to 50 years prison sentence.
In their sentencing memorandum, the prosecutors wrote, "Even now, Bankman-Fried refuses to admit what he did was wrong."
"His life in recent years has been one of unmatched greed and hubris; of ambition and rationalization; and courting risk and gambling repeatedly with other people's money," they added.
The prosecutors have set $11 billion in forfeiture, to compensate for FTX's investors and Alameda's lenders' losses.
A jury found Bankman-Fried guilty in November of seven counts of fraud and conspiracy. Federal prosecutors in Manhattan stated that "thousands of everyday people," including residents of war-torn and unstable countries, had entrusted their funds to FTX.
Bankman-Fried's lawyer Marc Mukasey told US District Judge Lewis Kaplan that a 5-1/4 to 6-1/2 year prison term would be fit, believing that FTX clients would retrieve most of their money and that Bankman-Fried did not intend to steal.
The Spokesperson for Bankman-Fried Mark Botnick stated that Mukasey would file a response next week to the prosecutors' memorandum as Bankman-Fried's sentence is set for March 28 in Manhattan Federal court and he is planning on appealing his sentence and conviction.
Privilege and superiority
When sentencing Bankman-Fried, the prosecutors included his privileged life and prestigious education as part of the reason why his sentence should be harsher than usual.
They emphasized that "he knew what society deemed illegal and unethical, but disregarded that based on a pernicious megalomania guided by the defendant's own values and sense of superiority."
Bankman-Fried parents are both Stanford Law School professors. He is a Massachusetts Institute of Technology graduate and worked on Wall Street before going into the world of the values of digital assets such as bitcoin, growing to a net worth Forbes magazine once predicted at $26 billion.
However, his fortune was gone in November 2022, as FTX declared bankruptcy after a surge of customer withdrawals.
Bankman-Fried did that, Biden's cameo appearance
Three of Bankman-Fried's former close associates testified during his trial that he ordered them to loot FTX customer funds to stop losses at his Alameda Research hedge fund, while presenting himself publicly as a responsible leader in the cryptocurrency market.
Prosecutors also revealed that Bankman-Fried utilized customer funds to buy luxury real estate in the Bahamas and to give money to US politicians who might back cryptocurrency-friendly regulations.
So far, prosecutors added, 251 US political candidates and committees have given back around $3.3 million in contributions to the government from Bankman-Fried and other FTX executives.
US President Joe Biden's campaign and the Republican National Committee are among those that have handed back funds.
Owning up and handcuffs
Bankman-Fried testified that he was not aware of Alameda's debt to FTX until shortly before both collapsed.
In a letter to Kaplan, Bankman-Fried's parents pled their son owned up for the mistakes that led to FTX's collapse and tried hard before his arrest to help get back customers' money.
In December 2022, Bankman-Fried was arrested in the Bahamas, FTX's base, and extradited to the US.
Since August last year, the former billionaire has been in jail at Brooklyn's Metropolitan Detention Center when Kaplan took back his bail upon discovery of his involvement in witness tampering.
