Federal prosecutors are seeking a 40- to 50-year prison sentence for Sam Bankman-Fried, the former CEO of the now-bankrupt cryptocurrency exchange FTX, over charges of massive fraud.
Bankman-Fried, who was found guilty on seven counts of fraud and conspiracy in November, was convicted of stealing $8 billion from FTX customers, leading to the exchange’s collapse, Reuters reported Friday (March 15).
Prosecutors argued Friday that Bankman-Fried demonstrated “unmatched greed and hubris,” using customer funds for risky investments and personal gain, according to the report. They are seeking $11 billion in forfeiture to compensate for the losses suffered by FTX investors and Alameda’s lenders.
In contrast, Bankman-Fried’s defense lawyer, Marc Mukasey, argued for a more lenient prison term of 5-1/4 to 6-1/2 years, claiming that FTX clients will receive most of their money back and that Bankman-Fried did not intend to steal, the report said.
Bankman-Fried, once a prominent figure in the cryptocurrency industry with a net worth of $26 billion, according to Forbes, saw his fortunes change dramatically following FTX’s bankruptcy in November 2022, per the report.
On Friday, prosecutors argued that his privileged upbringing and elite education should be considered when determining his sentence, according to the report.
During the trial, three former close associates testified that Bankman-Fried directed them to use FTX customer funds to cover losses at his hedge fund, Alameda Research, the report said. He is also accused of using customer funds to buy luxury real estate in the Bahamas and make political donations to candidates who might support cryptocurrency-friendly regulations.
So far, 251 U.S. political candidates and committees have returned over $3.3 million in contributions from Bankman-Fried and other FTX executives.
Bankman-Fried, who was arrested in the Bahamas in December 2022, plans to appeal his conviction and sentence, per the report. His sentencing is scheduled for March 28 in Manhattan federal court.
In a recent development at FTX, a judge ruled in February that the bankrupt crypto exchange could sell its shares in artificial intelligence (AI) startup Anthropic. FTX plans to sell the shares to repay customers who lost access to their accounts when the company collapsed.