Finance: Prosecutors demand decades in prison for Bankman-Fried

Finance: Prosecutors demand decades in prison for Bankman-Fried

Several months after the conviction of former crypto king Sam Bankman-Fried, the sentence will soon be determined. The ideas of the prosecution and his lawyers are far apart.

US prosecutors want to send cryptocurrency entrepreneur Sam Bankman-Fried, who was convicted of fraud, to prison for 40 to 50 years. As justification, they pointed out in their application, among other things, that investor losses amounted to more than ten billion dollars (the equivalent of 9.2 billion euros). Judge Lewis Kaplan is expected to decide on the sentence at the end of March.

The 32-year-old founder of the cryptocurrency exchange FTX was found guilty by a jury in November. If Kaplan exhausts the proposed penalties on all charges, it could be more than 100 years in prison. Bankman-Fried’s lawyers suggested around six years in prison.

FTX, one of the largest trading venues for cryptocurrencies such as Bitcoin, collapsed spectacularly at the end of 2022. Bankman-Fried was arrested in the Bahamas and extradited to the United States.

Prosecutors accuse Bankman-Fried of “unmatched greed.”

While the cryptocurrency business can be complicated, in the end the fraud case can be summed up in three words: misappropriation of customer assets. Bankman-Fried also had a hedge fund called Alameda Research that made risky trades and borrowed funds from FTX. Actually, collateral should have been deposited for such transactions. There were also computer systems that were supposed to take care of this. But this software made a secret exception for Alameda. This allowed the hedge fund to go as deep as it wanted on FTX. But the Alameda deals went wrong – and there was a billion-dollar hole in the FTX coffers.

Bankman-Fried said in court that he had only a partial understanding of his companies’ financial situation. However, prosecutors accused him of “unsurpassed greed” and emphasized that given the “historic” dimension of the crime, the punishment should be appropriately high. This should also “promote respect for the law”. Prosecutors also accused Bankman-Fried of repeatedly lying under oath. If the judge also comes to this conclusion, the sentence could be higher.

Source: Stern

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