Prosecutors said in a new court filing that Sam Bankman-Fried should spend 40–50 years in prison after being convicted of stealing $8 billion from customers of his defunct crypto platform FTX.
In a 116-page sentencing memo filed on March 15 at the U.S. District Court in Manhattan, prosecutors wrote that Mr. Bankman-Fried’s various crimes merit a “very significant sentence” of 40–50 years behind bars in order to deter similar actions and to protect the public.
“The defendant victimized tens of thousands of people and companies, across several continents, over a period of multiple years. He stole money from customers who entrusted it to him; he lied to investors; he sent fabricated documents to lenders; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials,” they wrote. “Each of these crimes is worthy of a lengthy sentence.”
His lawyers have asked for a much shorter sentence of up to six and a half years, arguing that Mr. Bankman-Fried didn’t set out to steal and that FTX clients would get most of their money back.
Prosecutors argued that Mr. Bankman-Fried deserves a long sentence because even if his victims do get some money back eventually after bankruptcy proceedings conclude, they suffered significant harm by losing access to their funds.
“I believe that it is reasonable to sentence Mr. Bankman-Fried to life in prison. His crime was so significant in scale and scope that I would argue it threatened the social order. His actions disrupted the cryptocurrency market, and he used several million dollars of his takings to influence the political process,” Mr. Wolfram said.
‘Devastated’ and ‘Heartbroken’
Prosecutors said in the sentencing memo that just the financial losses alone that Mr. Bankman-Fried’s fraudulent actions imposed on customers, investors, and lenders, justify a sentencing range at the top of court guidelines.“The victims in this case include people who deposited their retirement funds and nest eggs with FTX; they include people in war-torn or financially insecure countries, who counted on FTX as a place to keep money safe; they include people who could not afford to have their money taken or rendered unavailable,” prosecutors wrote. “They include people who lost their ‘entire life savings,’ no longer have money to pay for a sick family member or children’s education, were deprived of the chance to ‘break generational poverty,’ and are ‘devastated’ and ‘heartbroken.’”
Mr. Bankman-Fried’s $150 million bribe of Chinese officials was also one of the single largest by an individual, prosecutors noted.
“Even following FTX’s bankruptcy and his subsequent arrest, Bankman-Fried shirked responsibility, deflected blame to market events and other individuals, attempted to tamper with witnesses, and lied repeatedly under oath,” prosecutors said, adding that, “even now Bankman-Fried refuses to admit what he did was wrong.”
Having set a goal of “amassing endless wealth and unlimited power,” including ambitions of becoming U.S. president or the world’s first trillionaire, Mr. Bankman-Fried went to great lengths to achieve his aims, prosecutors wrote. This included using FTX customers’ money to buy luxury real estate, make charitable donations for which he took credit, make political contribtuions to get access to political leaders, and pay for access to celebrities.
The Unraveling
Mr. Bankman-Fried founded FTX in May 2019 and aggressively pitched himself and his business to investors, politicians, journalists, and regulators around the world. At its peak, FTX was valued at $32 billion while Mr. Bankman-Fried’s net worth was estimated to be $26 billion.At the height of his success, Mr. Bankman-Fried was hailed as a philanthropist and the second-largest individual donor to the Democratic Party.
FTX collapsed in November 2022 amid a liquidity crisis exacerbated by larger rival Binance’s decision to withdraw from a prospective rescue deal.
Traders quickly withdrew billions from the platform, and the business eventually filed for Chapter 11 bankruptcy on Nov. 11, 2022.
Millions of FTX users lost access to their crypto wallets and an investigation into the collapse led to the arrest of Mr. Bankman-Fried in December 2022 in the Bahamas.
Following his arrest, three U.S. agencies—the Commodity Futures Trading Commission, the Securities and Exchange Commission, and the U.S. Attorney for the Southern District of New York—all filed charges.
Mr. Bankman-Fried’s charges included wire fraud, as well as conspiracies to commit wire fraud, commodities fraud, securities fraud, money laundering, and fraud against the United States.
