FILE – Sam Bankman Freed appears in Manhattan Federal Court in New York on February 16, 2023. Bankman Fried's lawyers are seeking lenient punishment at the FTX founder's sentencing for crypto crimes next month. Lawyers made appearance arguments late Monday, February 26, 2024, in federal court in Manhattan. (AP Photo/Seth Wenig, File)
(NewsNation) — Sam Bankman Fried, 32, founder and former CEO of cryptocurrency exchange FTX, was charged Thursday with fraud stemming from a federal investigation and reports of misuse of customer funds. He is scheduled to be sentenced.
He faces a potential serious sentence, which his lawyer calls “grotesque” and “barbaric” and argues that Bankman-Fried's prison sentence will be in the single digits.
U.S. District Judge Lewis Kaplan will oversee the sentencing, which is scheduled for 9:30 a.m. ET in the Southern District of New York District Court in Manhattan.
what did he do?
A New York jury in November convicted Bankman Freed of fraud for stealing at least $10 billion from customers and investors.
His arrest came the day before he was scheduled to testify before the House Financial Services Committee.
At the time, Bankman Fried was on paper one of the richest people in the world. FTX has grown to become his second largest cryptocurrency exchange in the world, and Bankman Freed's net worth was estimated at $32 billion.
However, in November 2022, reports began questioning FTX's finances. Customers moved to withdraw billions of dollars, but FTX allegedly used customer deposits to cover bad bets at Alameda Research, Bankman Freed's investment arm, and refused to meet all requests. I couldn't do it.
What is the maximum fine?
Bankman-Fried could technically face up to 110 years in prison, but prosecutors are recommending about half that amount.
Mark Mukasey, Bankman Freed's attorney, said in February that the proposed 100-year sentence would be “grotesque” and “barbaric” based on probation calculations at the time.
Defense attorneys asked the judge to reject suggestions that he is an “intelligent, complex and humane person” and a first-time offender.
What are the prosecutors looking for?
Federal prosecutors have since announced they are seeking a 40- to 50-year sentence for Bankman-Freed.
They submitted their recommendations earlier this month ahead of Thursday's ruling. However, the judge will also consider the probation officer's proposed 100-year sentence and the defense's request for a reduced sentence and a prison sentence no higher than the single digits, the Associated Press reported.
What did the defense say?
Bankman Fried's lawyers rejected the image the media has cast of him as an “evil genius,” instead emphasizing that the FTX founder is a first-time, non-violent offender. His lawyers say the appropriate sentence would be based on guidelines calling for five to six-and-a-half years in prison.
“(Bankman Freed) was joined by at least four other guilty parties in the conduct in question. Victims are ready to recover every cent on the dollar — always ready to recover. “There was a problem,” Mukasey wrote in a court filing. At the beginning of this year.
No matter what sentence Bankman Fried receives, he will never be truly free, his lawyer said, according to the Associated Press. Instead, Mukasey wrote, the FTX founder will be subject to public scorn throughout his life.
What impact could it have on the crypto industry?
Bankman Freed laid the foundation for legalizing and normalizing cryptocurrencies in the public eye. NewsNation contributor Lydia Moynihan said after the trial that his conviction could lead to stricter regulations surrounding cryptocurrencies..
“This is a huge step back from what we have seen with the Cryptocurrency Agency,” she said.
FTX Trading Limited CEO John J. Ray III said Bankman Freed's victims continue to suffer the consequences.
According to the Associated Press, bankruptcy law requires each debt to be valued as of November 11, 2022, when the value of cryptocurrencies was 400% lower than it is today.
Mr. Lei also claimed $150 million in bribes that prosecutors allege he paid to Chinese government officials, as well as the nearly He also noted that some funds, such as 100,000 Bitcoins, will not be recoverable.
The Associated Press contributed to this report.
