Sam Bankman-Fried should be sent to prison for up to 50 years for “orchestrating one of the largest financial frauds in history”, US prosecutors told a judge ahead of the FTX founder’s sentencing this month.
In a submission at the weekend, the government said the 32-year-old, who was found guilty on seven charges of fraud and money laundering late last year, “victimised tens of thousands of people” by stealing more than $8 billion (€7.3 billion) from customers and investors before his cryptocurrency exchange collapsed in November 2022.
Federal prosecutors in Manhattan dismissed the claim from Mr Bankman-Fried’s lawyers that their client should be shown leniency because customers are likely to recover their funds via the FTX bankruptcy proceedings. They pointed to “the suffocating sense of dread and despair that victims felt when they could not withdraw their money, their shame and embarrassment, and the resulting damage to lives and businesses, cannot be undone”.
Last month, lawyers for the former crypto tycoon asked the court to impose a sentence of no more than 6½ years, portraying their client as a “selfless” and “altruistic” young man who “committed his life to philanthropy”.
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They called a 100-year sentence recommended by probation officers “grotesque” and “barbaric” and said that as a person with autism spectrum disorder, Mr Bankman-Fried was “uniquely vulnerable in a prison population”.
But in its submission, the government said the FTX founder “understood the rules, but decided they did not apply to him” and engaged in unethical behaviour “based on a pernicious megalomania” and a “sense of superiority”.
Prosecutors said there was “a significant likelihood that if the defendant is released back into society at a young enough age he will have the opportunity to engage in another fraud”.
“That is not just speculation,” they added. “In the days following FTX’s bankruptcy, and even after the defendant had been indicted, he mused about launching ‘Archangel LTD’, which would be an alternative to FTX’s bankruptcy and would result in the relaunching of an exchange.”
Prosecutors also underlined earlier allegations against Bankman-Fried that never made it to trial. Those include claims that he had bribed Chinese government officials and that he and his company had made “unlawful political donations to over 300 politicians and political action groups, amounting to in excess of $100 million”, in what they said was the largest-ever campaign finance offence.
Mr Bankman-Fried’s lawyers previously vowed to appeal against the verdict, but his counsel have not yet done so. The sentencing hearing is set for March 28th.
Caroline Ellison, Gary Wang and Nishad Singh – three of Bankman-Fried’s closest colleagues at FTX who pleaded guilty and testified against him at trial – are set to be sentenced at a later date. – Copyright The Financial Times Limited 2024
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