Now dethroned, Bankman-Fried is ready to be sentenced Thursday in a New York federal court docket for crimes linked to the collapse of the crypto alternate. Final 12 months, a jury discovered the 32-year-old responsible of stealing billions of {dollars} from FTX clients and defrauding buyers and lenders to his crypto funding agency Alameda Analysis.
Federal prosecutors say Bankman-Fried dedicated one of many biggest monetary frauds in U.S. historical past. Fueled by greed and hubris, he used different folks’s cash to fund his lavish way of life, make dangerous investments and pursue his political agenda, in response to prosecutors.
They requested U.S. District Choose Lewis Kaplan, who’s presiding over the case, to condemn Bankman-Fried to 40 to 50 years in jail.
“There’s a important chance that if the defendant is launched again into society at a younger sufficient age he can have the chance to have interaction in one other fraud,” prosecutors mentioned in a court docket submitting.
Bankman-Fried’s legal professionals mentioned a sentence of not more than six years in jail was extra acceptable, arguing he nonetheless had a lot to supply to society. They pointed to his autism, his deep regret and his charitable works as causes for a lenient sentence. They argued that clients, lenders and buyers would get again any cash they misplaced.
“Sam just isn’t the ‘evil genius’ depicted within the media or the grasping villain described at trial,” his legal professionals wrote, however moderately “a superb, advanced and humane particular person.”
Thursday’s listening to begins at 9:30 a.m. and is anticipated to final no less than a number of hours. The prosecution and protection can have a last probability to pitch to the choose what both sides thinks is an acceptable jail time period. Bankman-Fried and no less than one sufferer are anticipated to talk in court docket earlier than the choose fingers down the sentence.
The sentencing caps the meteoric rise and fall of Bankman-Fried. The son of Stanford Regulation College professors began FTX in 2019 with a fellow Massachusetts Institute of Know-how graduate. The corporate had a fast takeoff, using a tide of rising recognition in crypto buying and selling.
Hundreds of thousands of consumers joined his alternate, drawn to Bankman-Fried’s picture as a shaggy-haired genius and to FTX commercials starring NFL star Tom Brady and comic Larry David. Because the alternate soared in worth, Bankman-Fried crisscrossed the globe on non-public jets and hosted dinners with visitors similar to Invoice Clinton and Tony Blair. He turned a prime political donor in Washington, holding himself out as a reliable determine searching for laws to make clear the foundations round crypto.
That world got here crashing down in early November 2022 after the crypto web site CoinDesk revealed what presupposed to be a leaked Alameda stability sheet, inflicting a run on FTX buyer funds. Quickly after, the alternate filed for chapter safety. The Manhattan U.S. legal professional’s workplace charged Bankman-Fried a month later.
Throughout a monthlong trial within the fall, jurors heard testimony from three of Bankman-Fried’s prime lieutenants, together with his ex-girlfriend, who mentioned the FTX founder directed them to commit crimes alongside him. Bankman-Fried took the weird step of testifying in his personal protection. He advised jurors that he by no means dedicated fraud, but he struggled below cross examination, saying dozens of instances that he didn’t recall specifics.
Within the weeks earlier than the sentencing, Bankman-Fried’s supporters wrote letters to the choose, saying that his struggles with despair, autism and anhedonia—the shortcoming to really feel happiness—weigh in favor of a lighter sentence.
In letters to the choose, his supporters, starting from his mom to an ex-police officer who mentioned he befriended Bankman-Fried whereas incarcerated, argued for leniency.
Carmine Simpson, the ex-police officer, mentioned that the FTX founder was a selfless one that adhered to his beliefs, even in jail. “Though twelve out of each fourteen of Sam’s weekly meals are simply undercooked rice, a scoop of disgusting-looking beans and week-old brown lettuce, Sam has stayed true to his dedication to not take part within the maltreatment of animals,” he wrote. Simpson pleaded responsible final 12 months to sexual exploitation of a kid, in response to court docket information.
Bankman-Fried’s mom, Barbara Fried, mentioned in her letter to Kaplan that her son had sought to do good on the earth from a younger age. When he was 4 years previous, she mentioned, he tried to assist a fallen toddler. He was precocious as effectively, she mentioned, independently studying advanced ethical and philosophical literature in center college. In highschool, he endorsed classmates who have been depressed, regardless of battling despair himself, she mentioned.
“However this isn’t only a private tragedy,” she wrote to the choose. “The benefit with which we consign younger lives with a lot promise to the trash heap is a societal tragedy as effectively.”
Prosecutors mentioned Bankman-Fried’s fraud amounted to $10 billion in losses, inserting him alongside the nation’s most infamous white-collar criminals. They likened him to Bernie Madoff, the Manhattan financier who orchestrated a Ponzi scheme that led to $13 billion in losses. Madoff acquired a sentence of 150 years and died in jail at 82 in 2021.
Whereas the monetary loss in Madoff’s case was larger, prosecutors mentioned, Bankman-Fried’s fraud had an additional attain as a result of he had tens of hundreds of victims from all over the world.
“We have been dropped at the brink of shedding our house, struggling to fulfill mortgage funds and keep a semblance of normalcy for our youngster,” one sufferer wrote in a letter to Kaplan.
Attorneys for Bankman-Fried argued that the sentence handed all the way down to Madoff, who was 71 on the time, was largely symbolic.
Present FTX Chief Govt John Ray mentioned in a submitting to the choose that clients are anticipated to be repaid the worth of their declare on the date the alternate filed for chapter safety. Nevertheless, many cryptocurrencies have surged in worth since that point, which means clients will miss out on the monetary acquire, he mentioned.
“Prospects nonetheless won’t ever be in the identical place they might have been had they not crossed paths with Mr. Bankman-Fried and his so-called model of ‘altruism,’” Ray mentioned.
Write to James Fanelli at james.fanelli@wsj.com and Corinne Ramey at corinne.ramey@wsj.com
Supply: Live Mint