EGN NEWS DESK
Federal prosecutors stated 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 in Manhattan. Mr. Bankman-Fried’s sentencing listening to is scheduled for March 28, when Judge Lewis A. Kaplan will resolve his destiny. He faces a most potential penalty of 110 years.
“Justice requires that he obtain a jail sentence commensurate with the extraordinary dimensions of his crimes,” the prosecutors stated in a 116-page sentencing memo to the judge.
The federal probation division individually beneficial a 100-year sentence for Mr. Bankman-Fried, 32, successfully a life sentence. But prosecutors stated within 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.
In a submitting final month, attorneys for Mr. Bankman-Fried argued that he ought to obtain a sentence of not more than six and a half years.
A spokesman for Mr. Bankman-Fried stated Friday {that a} lawyer for him will file a response to the federal government early subsequent week.
Just 18 months in the past, Mr. Bankman-Fried was a high-flying crypto mogul, presiding over the cryptocurrency trade FTX, a $40 billion enterprise empire. But then FTX collapsed virtually in a single day, placing him within the cross hairs of regulation enforcement.
In November, a federal jury in Manhattan convicted Mr. Bankman-Fried of stealing $8 billion from FTX’s prospects to finance political contributions, investments in different firms 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. legal professional for the Southern District of New York, stated after the decision, “however this type of fraud, this type of corruption, is as outdated as time.”
Since then, the crypto trade seems to have put Mr. Bankman-Fried’s crimes within the rearview mirror. As he prepares for his sentencing, the costs of most digital property have soared, with Bitcoin reaching a file excessive this month.
Prosecutors stated in Friday’s submitting {that a} sentence of 40 to 50 years was acceptable given the magnitude of Mr. Bankman-Fried’s fraud and its influence on folks 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 — at the least $10 billion — makes this one of many largest monetary frauds of all time.”
If Mr. Bankman-Fried is given a light-weight sentence, prosecutors stated, there’s a actual threat that he would perform some future fraud.
In 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 gaining access to their accounts.
Marc Mukasey, the lawyer Mr. Bankman-Fried employed to arrange for the sentencing, argued in his authorized submitting that the 100-year sentence beneficial by the probation division could be harking back to the 150 years given to Bernard Madoff, who pleaded responsible in 2009 to operating one of many greatest Ponzi schemes in historical past. Any comparisons between the 2 males are inappropriate, Mr. Mukasey stated, given “the length 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 stated.
Mr. Mukasey additionally identified that it took a court-appointed trustee greater than 15 years to return roughly $14 billion to Mr. Madoff’s traders. By distinction, the chapter attorneys overseeing FTX’s unwinding have steered that prospects of Mr. Bankman-Fried’s failed trade are prone to get again all of their cash on a comparatively quick timeline.
Prosecutors stated of their submitting that even when prospects of FTX bought most of their a reimbursement, they’d have needed to look forward to greater than two years for that to occur. Prosecutors stated that “is of little consolation for these victims who wanted the cash in November 2022.”
In the submitting, prosecutors requested Judge 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 tens of millions of potential victims and the complexity of calculating losses, prosecutors stated any cash turned over by Mr. Bankman-Fried would finest be distributed within the FTX chapter.
Judges usually are not required to observe federal sentencing tips. And in imposing a sentence, Judge Kaplan can contemplate a wide range of elements, together with Mr. Bankman-Fried’s age, the truth that he’s a first-time offender and the potential for him to be rehabilitated.
But one issue that will work in opposition to Mr. Bankman-Fried is that he selected to testify at his trial and appeared evasive at occasions throughout cross-examination. If Judge 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 Law Journal, John S. Martin, a former federal judge in Manhattan, criticized “irrationally lengthy sentences” for many fraud and white-collar crime. He stated 100-year sentences had had “no influence on crime charges.”
“Let me be clear, Bankman-Fried deserves to be punished,” Mr. Martin wrote. But he added, “Our extraordinarily lengthy jail sentences are one of many causes the United States has the most important jail inhabitants on this planet.”
