NEW YORK (AP) — Former crypto tycoon Sam Bankman-Fried faces the potential of decades in prison when he is sentenced Thursday for his role in the 2022 collapse of FTX, once one of the world’s most popular trading platforms with digital currency.
Bankman-Fried, 32, was convicted in November of fraud and conspiracy — a dramatic drop from a year earlier, when he and his companies appeared on the cusp of success that led to a Super Bowl ad and celebrity endorsements from stars like quarterback Tom Brady and comedian Larry David.
A jury found that Bankman-Fried illegally used money from FTX depositors to cover his expenses, which included the purchase of luxury properties in the Caribbean, alleged bribes to Chinese officials and private jets.
The prosecution proposed a sentence of 40 to 50 years in prison.
“The defendant victimized tens of thousands of people and companies on several continents over a period of several years. He stole money from clients who entrusted it to him; he lied to investors; sent fabricated documents to creditors; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials. Each of these crimes deserves a long sentence,” prosecutors told Judge Lewis A. Kaplan in a court filing.
Bankman-Fried’s lawyers, friends and family appealed for leniency, saying he was unlikely to reoffend. They also say FTX’s investors have largely recouped their funds, a claim contested by bankruptcy attorneys, FTX and its creditors.
“Mr. Bankman-Fried continues to live a life of delusion,” wrote John Ray, CEO of FTX, which is cleaning up the bankrupt company. “The ‘business’ he left on November 11, 2022, was neither solvent nor , nor safe.’
Two weeks ago, Bankman-Fried’s lawyer, Mark Mukasey, attacked the probation service’s recommendation of 100 years in prison, saying a sentence of that length would be “grotesque” and “barbaric.”
He urged the judge to sentence Bankman-Fried to five to six and a half years in prison.
“Sam is not the ‘evil genius’ portrayed in the media or the greedy villain portrayed at trial,” Mukasey said, calling his client a “non-violent first-time offender.”
Bankman-Fried was worth billions of dollars on paper as the co-founder and CEO of FTX, which was the second largest cryptocurrency exchange in the world at one time.
FTX allowed investors to buy dozens of virtual currencies, from Bitcoin to more obscure ones like Shiba Inu Coin. Flush with billions of dollars in investor money, Bankman-Fried ran a Super Bowl commercial to promote his business and bought the naming rights to an arena in Miami.
But the cryptocurrency price crash of 2022 took its toll on FTX and ultimately led to its downfall. FTX’s hedge fund affiliate, known as Alameda Research, had bought billions of dollars worth of various crypto investments that lost significant amounts of value in 2022. Bankman-Fried attempted to plug the holes in Alameda’s balance sheet with FTX client funds.
Three other people in Bankman-Fried’s inner circle pleaded guilty to related crimes and testified at his trial.
The biggest name among the three was Caroline Ellison, a one-time friend of Bankman-Fried. Ellison described Bankman-Fried as a calculating person who knew he was likely to commit crimes when directing the use of client funds. Two other former friends of Bankman-Fried, Gary Wang and Nishad Singh, also testified that they believed they were directed by Bankman-Fried to commit fraud.