Lawyer For Bankman-Fried Urges Judge Not To Impose 100-Year Sentence

Sam Bankman-Fried. Image credit: FTX

Sam Bankman-Fried’s lawyer asks US judge to reject 100-year recommended prison sentence for disgraced FTX co-founder

Former crypto billionaire and FTX founder and CEO Sam Bankman-Fried, is this week facing the harsh reality of how much time he could spend in prison.

The Associated Press reported that Sam Bankman-Fried’s lawyer on Tuesday has asked a US judge to reject a 100-year recommended prison sentence for his client.

After a month long trial, Bankman-Fried had in November 2023 been found guilty of all US charges (including fraud, money-laundering and stealing funds) for his role in the collapse of FTX and Alameda Research.

ftx, cryptocurrency

FTX collapse

FTX had collapsed into Chapter 11 bankruptcy protection back in November 2022, when a multi-billion dollar hole was found in its balance sheet – amid reports of financial impropriety.

The collapse was triggered after FTX management had failed to secure rescue bid and additional funding.

Bankman-Fried immediately stepped down as CEO and was replaced by turnaround specialist John J. Ray III, who heavily criticised the management practices of Bankman-Fried.

He alleged that Bankman-Fried had failed to put into place “basic, widely accepted” security controls to guard its crypto assets, such as the use of “cold” wallets rather than those directly linked to the internet, or the use of multi-factor authentication.

FTX has recovered over $7 billion in assets to repay customers, and it has reached agreements with various government regulators who have agreed to wait until customers are fully repaid before attempting to collect on about $9 billion in claims

Last month FTX abandoned efforts to restart its crypto exchange, instead opting to liquidate all assets and return funds to customers.

Barbaric proposal

Now according to the Associated Press, Sam Bankman-Fried’s lawyer has labelled a suggested 100-year prison sentence for the FTX founder as “grotesque” and “barbaric”.

The lawyer instead said that at most a prison term of a few years behind bars is appropriate for the cryptocurrency crimes that Bankman-Fried still disputes.

In presentence arguments filed just minutes before a late Tuesday deadline in Manhattan federal court, attorney Marc Mukasey was quoted by AP as saying that a report by Probation officers improperly calculated federal sentencing guidelines to recommend a sentence just 10 years short of the maximum potential 110-year sentence.

A proper sentence, Mukasey said, would be based on guidelines that would call for between five years and 6 1/2 years in prison, at most.

Mukasey said that the Probation office “recommends that the Court sentence Sam to 100 years in prison. That recommendation is grotesque.” He called on the judge to reject the “barbaric proposal” for a “brilliant, complex and humane person” who doesn’t use drugs, rarely drinks and is a first-time offender.

“Sam is not the ‘evil genius’ depicted in the media or the greedy villain described at trial,” Mukasey wrote. “Sam is a 31-year-old, first-time, non-violent offender, who was joined in the conduct at issue by at least four other culpable individuals, in a matter where victims are poised to recover – were always poised to recover – a hundred cents on the dollar.”

A spokesperson for prosecutors, who will respond in court papers in mid-March, declined comment, AP reported.

Marc Mukasey noted, however, that prosecutors have agreed with the 100-year recommendation and say it was supported by trial evidence.

On 28 March, Judge Lewis A. Kaplan will sentence Bankman-Fried.