Federal prosecutors mentioned on Friday that Sam Bankman-Fried, the cryptocurrency mogul who was convicted of masterminding a multibillion-dollar fraud, ought to obtain a jail sentence of 40 to 50 years.
The prosecutors outlined the advice in a submitting in U.S. District Court docket in Manhattan. Mr. Bankman-Fried’s sentencing listening to is scheduled for March 28, when Decide Lewis A. Kaplan will determine his destiny. He faces a most doable penalty of 110 years.
“Justice requires that he obtain a jail sentence commensurate with the extraordinary dimensions of his crimes,” the prosecutors mentioned in a 116-page sentencing memo to the decide.
The federal probation division individually beneficial a 100-year sentence for Mr. Bankman-Fried, 32, successfully a life sentence. However prosecutors mentioned in the submitting that sending him to jail for the remainder of his life was not warranted, regardless of the severity of his crime, due to his relative youth.
A spokesman for Mr. Bankman-Fried mentioned Friday {that a} lawyer for him will file a response to the federal government early subsequent week.
Simply 18 months in the past, Mr. Bankman-Fried was a high-flying crypto mogul, presiding over the cryptocurrency change FTX, a $40 billion enterprise empire. However then FTX collapsed virtually in a single day, placing him in the cross hairs of regulation enforcement.
In November, a federal jury in Manhattan convicted Mr. Bankman-Fried of stealing $eight billion from FTX’s prospects to finance political contributions, investments in different corporations and lavish actual property purchases.
FTX’s implosion and Mr. Bankman-Fried’s subsequent arrest and conviction have been seen as a historic nadir for the loosely regulated crypto world.
“The crypto trade is perhaps new,” Damian Williams, the U.S. lawyer for the Southern District of New York, mentioned after the decision, “however this type of fraud, this type of corruption, is as previous as time.”
Since then, the crypto trade seems to have put Mr. Bankman-Fried’s crimes in the rearview mirror. As he prepares for his sentencing, the costs of most digital belongings have soared, with Bitcoin reaching a report excessive this month.
Prosecutors mentioned in Friday’s submitting {that a} sentence of 40 to 50 years was applicable given the magnitude of Mr. Bankman-Fried’s fraud and its influence on individuals around the globe, together with those that had put a few of their retirement cash and life financial savings into FTX.
“The sheer scale of Bankman-Fried’s fraud requires extreme punishment,” prosecutors wrote. “The quantity of loss — not less than $10 billion — makes this one of many largest monetary frauds of all time.”
If Mr. Bankman-Fried is given a lightweight sentence, prosecutors mentioned, there’s a actual danger that he would perform some future fraud.
Within the sentencing submission, prosecutors included a number of pages of buyer messages despatched to Mr. Bankman-Fried on X, previously Twitter, on the time of FTX’s collapse. In most of the posts, prospects expressed anger at not having entry to their accounts.
Marc Mukasey, the lawyer Mr. Bankman-Fried employed to put together for the sentencing, argued in his authorized submitting that the 100-year sentence beneficial by the probation division could be paying homage to the 150 years given to Bernard Madoff, who pleaded responsible in 2009 to working one of many greatest Ponzi schemes in historical past. Any comparisons between the 2 males are inappropriate, Mr. Mukasey mentioned, given “the period and {dollars}” concerned in Mr. Madoff’s crimes — a 20-year-long fraud that generated $64 billion in paper losses.
The probation division’s advice was “barbaric” and “grotesque,” he mentioned.
Mr. Mukasey additionally identified that it took a court-appointed trustee greater than 15 years to return roughly $14 billion to Mr. Madoff’s buyers. Against this, the chapter attorneys overseeing FTX’s unwinding have urged that prospects of Mr. Bankman-Fried’s failed change are probably to get again all of their cash on a comparatively quick timeline.
Prosecutors mentioned in their submitting that even when prospects of FTX obtained most of their a refund, they might have had to look ahead to greater than two years for that to occur. Prosecutors mentioned that “is of little consolation for these victims who wanted the cash in November 2022.”
Within the submitting, prosecutors requested Decide Kaplan to additionally order Mr. Bankman-Fried to forfeit greater than $10 billion, which represents the losses and stolen cash from his crime. Given the hundreds of thousands of potential victims and the complexity of calculating losses, prosecutors mentioned any cash turned over by Mr. Bankman-Fried may very well be distributed in the FTX chapter.
Judges will not be required to comply with federal sentencing pointers. And in imposing a sentence, Decide Kaplan can take into account quite a lot of components, together with Mr. Bankman-Fried’s age, the truth that he’s a first-time offender and the potential for him to be rehabilitated.
However one issue that will work in opposition to Mr. Bankman-Fried is that he selected to testify at his trial and appeared evasive at instances throughout cross-examination. If Decide Kaplan concludes that Mr. Bankman-Fried testified falsely, he might take that under consideration in deciding the sentence.
In a column this week in The New York Legislation Journal, John S. Martin, a former federal decide in Manhattan, criticized “irrationally lengthy sentences” for many fraud and white-collar crime. He mentioned 100-year sentences had had “no influence on crime charges.”
“Let me be clear, Bankman-Fried deserves to be punished,” Mr. Martin wrote. However he added, “Our extraordinarily lengthy jail sentences are one of many causes the USA has the most important jail inhabitants in the world.”