Sam Bankman-Fried is about to get sentenced for his FTX crimes. Here’s what to know
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Sam Bankman-Fried is about to get sentenced for his FTX crimes. Here’s what to know
Sam Bankman-Fried leaves Manhattan Federal Court after his arraignment and bail hearings on Dec. 22, 2022 in New York City. Bankman-Fried is awaiting his sentencing after being convicted of defrauding investors. He potentially faces decades in prison.
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Sam Bankman-Fried leaves Manhattan Federal Court after his arraignment and bail hearings on Dec. 22, 2022 in New York City. Bankman-Fried is awaiting his sentencing after being convicted of defrauding investors. He potentially faces decades in prison.
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Crypto wunderkind Sam Bankman-Fried is about to learn his fate.
In November, the former FTX chief executive was convicted of seven counts of fraud over the collapse of a crypto exchange that was once seen as one of the key players in the world of finance.
The sweeping conviction marked a stunning fall for the 32-year old former CEO who once hobnobbed with celebrities like quarterback Tom Brady and shared stages with world leaders like former President Clinton.
Prosecutors have asked for 40 to 50 years in prison, while Bankman-Fried’s lawyers have asked for far less.
Judge Lewis Kaplan, the experienced no-nonsense judge who presided over Bankman-Fried’s trial will hold a sentencing hearing at a Manhattan courtroom later in the day.
Here’s what to know as Bankman-Fried awaits his sentencing from his detention center in Brooklyn.
What was Bankman-Fried convicted of?
Bankman-Fried was convicted of seven counts of fraud by a New York jury last year.
The charges broadly cover two categories: stealing the money of customers who put their money into FTX accounts and lying to investors and creditors.
All in all, at least $8 billion in customer funds were believed to have been stolen. Prosecutors argued the money was used to fuel a lavish and luxurious lifestyle in the Bahamas, as well as for other purposes, like political lobbying and investing in other companies.
What kind of sentencing does Bankman-Fried face?
Sentencing guidelines recommend that the disgraced crypto evangelist serves up to 110 years behind bars, though prosecutors are asking for about half of that.
Meanwhile, Bankman-Fried’s lawyers argue that their client should serve 63 to 78 months in prison.
Ultimately, the decision will be up to Kaplan, a judge who has ruled in high-profile cases including most recently presiding over E. Jean Carroll’s defamation case against former president Trump.
During the Bankman-Fried trial, Kaplan kept a strictly business approach, frequently admonishing the former FTX CEO’s lawyers when he felt they were going on tangents unrelated to the case.
Bankman-Fried is onstage during the first annual Moonlight Gala benefitting Children With Special Needs at an event in New York City on June 23, 2022. At FTX’s height, Bankman-Fried was feted for his business skills until his crypto business collapsed.
Craig Barritt/Getty Images for CARE For Specia
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Bankman-Fried is onstage during the first annual Moonlight Gala benefitting Children With Special Needs at an event in New York City on June 23, 2022. At FTX’s height, Bankman-Fried was feted for his business skills until his crypto business collapsed.
Craig Barritt/Getty Images for CARE For Specia
What are the factors Judge Kaplan will consider?
At its heart Kaplan will have to weigh this central question: Was Bankman-Fried a criminal mastermind or a young computer geek who simply got in over his head?
In their 116-page sentencing memo, prosecutors argued the former FTX head showed “unmatched greed and hubris” and that he gambled with other people’s money.”
“Justice requires that he receive a prison sentence commensurate with the extraordinary dimensions of his crimes,” the prosecutors said.
Prosecutors also called Bankman-Fried’s crimes “one of the largest financial frauds of all time.”
Bankman-Fried’s lawyers, however, have pushed back aggressively against the prosecutors sentence recommendation, saying it incorrectly paints the former FTX head as a “depraved super villain.”
Lawyers have also argued Bankman-Fried suffers from autism and “neurodiversity” issues.
“He can be perceived as abrupt, dismissive, evasive, detached or uncaring,” the lawyers wrote in their sentencing memo.
At its height, FTX was promoted by sports celebrities such as Tom Brady, Steph Curry and Naomi Osaka.
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At its height, FTX was promoted by sports celebrities such as Tom Brady, Steph Curry and Naomi Osaka.
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Tama Kudman a partner at Kudman Trachten Aloe Posner called Kaplan a “very balanced judge” who will need to asses the two conflictive narratives.
“The judge is going to be thinking about how he can punish, send a message both to Mr. Bankman-Fried and to the community that will be deterrent and satisfy the goal of punishment,” she said. “But at the same time, balance the need to give this very young person an opportunity to rehabilitate and have a life.”
In asking for leniency, Bankman-Fried’s lawyers have also argued that customers and creditors are likely to be paid eventually in full.
A lot of FTX holdings were held in cryptocurrencies, which have a staged a huge rebound this year, as well as in stakes of other companies that are in the process of being sold off.
Prosecutors, however, have underscored that Bankman-Fried stole customers funds, and presented letters from people around the world detailing how much the loss of their crypto holdings in FTX had hurt them, both personally and financially.
Howard Fischer, a partner at Moses Singer, said he did not think Kaplan would be too swayed by the recovery arguments.
“It doesn’t matter that someone is able to recover the funds that they’ve taken, or stolen, or lost,” he said. “That’s nice. It’s a great thing for recovery, but it doesn’t diminish the amount of the loss.”