Updated Mar 15, 2024 - Business

Sam Bankman-Fried deserves 40 to 50 years in jail, government says

Illustration of the silhouette of Sam Bankman-Fried crumbling and falling.

Illustration: Brendan Lynch/Axios

U.S. prosecutors have weighed in on their recommendation to the district court in the southern district of New York for a sentence for FTX founder Sam Bankman-Fried: 40 to 50 years.

Why it matters: It would be one of the longest sentences ever given to a white-collar criminal, though short enough that Bankman-Fried would be likely to leave prison alive.

What they're saying: "A sentence of 40 to 50 years' imprisonment—though one that will permit the defendant to return to liberty after society can be assured that he will not have the opportunity to turn back to fraud and deceit—is necessary to reflect the seriousness of the defendant's crimes," United States Attorney Damian Williams notes in a filing to the court today.

  • The crux of the government's argument at trial was that FTX's ambitions got ahead of their available capital, and so it turned to deposits of its customers to fund endeavors it could not otherwise afford.
  • The sentencing memorandum revisits this story via a series of what it calls "inflection points" when Bankman-Fried chose to go further into undisclosed debt to his customers.
  • It details several such moments, beginning with the repurchase of Binance's shares in the company and ending in Nov. 2022, after the company's solvency had been questioned in the press, and Bankman-Fried told customers via social media that "FTX is fine."

Friction point: One of the most surprising choices made by the defense was to put Bankman-Fried on the stand. The prosecution makes much of the choices he made on the stand in their recommendation.

  • "Bankman-Fried demonstrated his willingness to deceive not only through his execution and management of the fraud at FTX, but also through his deceit in the face of investigation and indictment," Williams writes.
  • "When it came to his own testimony, the defendant engaged in perjury intended to deceive the jury about core facts of this commission of the fraud. Bankman-Fried's hostility to and deception of law enforcement demand a significant sentence."

Flashback: In February, Bankman-Fried's legal team argued that five to seven years would be appropriate, contending that — ultimately — customers and investors would not suffer actual monetary losses.

  • In November, the former entrepreneur was found guilty of all charges against him, including multiple counts of fraud and conspiracy to commit money laundering.

What's next: The defendant will be sentenced in Manhattan on March 28.

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