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Sam Bankman-Fried deserves 40-50 years in jail for FTX fraud, prosecutors say

Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges for the collapse of the insolvent cryptocurrency exchange, arrives outside the Manhattan federal court in New York City, U.S. March 30, 2023

NEW YORK, March 15 (mod1s) - Sam Bankman-Fried should serve between 40 and 50 years in jail after being convicted for stealing $8 billion from clients of his now-bankrupt FTX cryptocurrency exchange, authorities said on Friday. 

In November, a jury convicted Bankman-Fried, 32, guilty on seven counts of fraud and conspiracy. Federal prosecutors in Manhattan claimed "thousands of everyday people" including inhabitants of war-torn and insecure nations had committed their nest eggs to FTX.

"Even now Bankman-Fried refuses to admit what he did was wrong," prosecutors stated in a sentencing brief. "His life in recent years has been one of unmatched greed and hubris; of ambition and rationalization; and courting risk and gambling repeatedly with other people's money." 

They are seeking $11 billion in forfeiture, to account for damages FTX's investors and Alameda's lenders sustained as well.

The former billionaire's lawyer Marc Mukasey told U.S. District Judge Lewis Kaplan that a 5-1/4 to 6-1/2 year jail sentence would be fair. They maintained FTX customers will receive most of their money back, and that Bankman-Fried did not set out to steal. 

Mark Botnick, a spokesperson for Bankman-Fried, said Mukasey will submit a response next week to prosecutors' letter. 

Kaplan is slated to sentence Bankman-Fried on March 28 in Manhattan federal court. Bankman-Fried hopes to appeal his conviction and punishment.

Bankman-Fried is the son of two Stanford Law School professors. A graduate of the Massachusetts Institute of Technology, Bankman-Fried worked on Wall Street before riding a surge in the prices of digital assets like as bitcoin to a net worth Forbes magazine once valued at $26 billion. 

His money dissipated in November 2022, when FTX filed bankruptcy following a surge of consumer withdrawals. 

In its sentencing brief, prosecutors alluded to his wealthy background and high education as reasons he should receive a particularly punitive term.

"He knew what society deemed illegal and unethical, but disregarded that based on a pernicious megalomania guided by the defendant's own values and sense of superiority," they said. 

POLITICIANS RETURN DONATIONS 

At his prosecution, three former close friends claimed that Bankman-Fried ordered them to pilfer FTX client cash to cover losses at his Alameda Research hedge fund, while presenting himself publicly as a competent steward in the volatile cryptocurrency market. 

Prosecutors claimed Bankman-Fried allegedly used client cash to acquire luxurious real estate in the Bahamas and to give to U.S. lawmakers who may favor cryptocurrency-friendly policies. 

So far, 251 U.S. political candidates and committees have returned to the government roughly $3.3 million in donations from Bankman-Fried and other FTX officials, authorities said. Democratic President Joe Biden's campaign and the Republican National Committee are among those that have returned donations. 

Bankman-Fried said that he did not understand how much Alameda owed to FTX until just before both folded. His trial lasted one month. 

In a letter to Kaplan, Bankman-Fried's parents claimed their son accepted responsibility for the mistakes that led to FTX's bankruptcy, and worked hard before his arrest to assist recover clients' money. 

Bankman-Fried was arrested in December 2022 in the Bahamas, where FTX was located, and extradited to the U.S. 

He has been incarcerated at Brooklyn's Metropolitan Detention Center since August, when Kaplan revoked his bail after concluding that he likely interfered with witnesses.


Source: https://www.reuters.com/

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