Business

Crypto king Sam Bankman-Fried pleads for lenient prison sentence after conviction

FTX founder should face no more than six and a half years behind bars, his lawyers argue ahead of hearing next month

Lawyers for convicted fraudster and FTX founder Sam Bankman-Fried say he deserves to spend just a few years in prison. Photograph: Karsten Moran/The New York Times

Joe Miller
Wed Feb 28 2024 - 08:44

Sam Bankman-Fried deserves to spend just a few years in prison, lawyers for the convicted FTX founder have argued in a last-ditch appeal for clemency, portraying him as a “selfless” and “altruistic” young man who “committed his life to philanthropy”.

The former crypto tycoon, who was found guilty on seven charges of fraud and money laundering last year, is a “first-time, non-violent offender ... in a matter where victims are poised to recover – were always poised to recover – 100 cents on the dollar”, they said in a court filing on Tuesday.

Bankman-Fried’s lawyers said an appropriate sentence would range from 5½ to 6½ years. They called a 100-year sentence recommended by probation officers “grotesque” and “barbaric” and said that as a person with autism spectrum disorder, their client was “uniquely vulnerable in a prison population”.

Bankman-Fried was accused of raiding FTX depositors’ accounts to make a series of risky bets, repay loans and buy property, leaving an $8 billion (€7.4 billion) hole in the company’s balance sheet when it collapsed into bankruptcy in November 2022, with customers unable to withdraw their funds.

READ MORE

But a team of lawyers including Marc Mukasey, who was hired by Bankman-Fried to help him appeal for a lighter sentence, called for the court to consider how the 31-year-old had been “misunderstood” and wrongly compared to criminals such as Bernard Madoff, who had confessed to operating a large Ponzi scheme.

They said the “best comparison” to Bankman-Fried was the “junk bond king” Michael Milken, who served just two years after pleading guilty in 1990 to violating US security laws before going on to become a “tremendous force for good in the world” through charitable works.

At the time of FTX’s founding, “Sam, although brilliant, was 28 years old, in the infancy of his business career”, the filing said. “He was making thousands of business decisions a day, for the first time, in an immature and undisciplined cryptocurrency market, surrounded only by a group of similarly inexperienced (albeit very bright) 20-somethings ... He was, in essence, flying by the seat of his cargo shorts.”

The filing added that since the conclusion of Bankman-Fried’s trial, FTX’s bankruptcy proceedings had shown “the company was solvent at the time of the bankruptcy petition” and since creditors could expect to recoup their deposits, “the harm to customers, lenders, and investors is zero”.

Mukasey, who is known for his impassioned courtroom speeches, scored a concession for another client in recent months, after a New York judge sentenced Trevor Milton, the founder of electric and hydrogen-powered truck maker Nikola who had been convicted of fraud, to four years in prison – significantly short of the 11 years sought by government prosecutors.

Bankman-Fried’s lawyers previously vowed to appeal against the verdict, but his counsel have not lodged such an appeal to date. The government must make its sentencing recommendations by the middle of next month. The sentencing hearing is set for March 28th.

Caroline Ellison, Gary Wang and Nishad Singh – three of Bankman-Fried’s closest colleagues at FTX who pleaded guilty and agreed to testify against him at trial – are set to be sentenced at a later date. – Copyright The Financial Times Limited 2024

LATEST STORIES