Prosecutors seeking up to 50 years in jail for disgraced ‘Crypto King’

Sam Bankman-Fried was convicted of fraud and money laundering last year. He will return to court in New York on Thursday to be sentenced for his crimes. It is certain the 32-year-old will be going to jail; what is not known is how long for. His legal team have called for leniency, but prosecutors are seeking 40 to 50 years in prison.

They say such a sentence is warranted for someone who lied to investors and banks. His defence team has proposed five to 6. 5 years, accusing the government of adopting “a medieval view of punishment. FTX’s collapse in 2022 was a stunning fall for Bankman-Fried.

He had become a billionaire and business celebrity promoting the firm. But rumours of financial trouble sparked a run on deposits. Many of those customers now appear poised to recover significant sums. The repayment plan has left many former customers outraged, since they will miss out on the crypto rebound that has occurred since.

John Ray, the lawyer leading FTX through bankruptcy, noted the concerns in his own letter to court. He argued that the claims of minimal loss were a sign that Bankman-Fried continued to live a life of delusion. Former FTX customers say they are offended by the blithe dismissal of their problems. They have urged the judge to reject calls for leniency.

Arush Sehgal, a 38-year-old tech entrepreneur living in Barcelona, is one of the exchange’s biggest individual creditors with about $4m worth in savings. Law professor Daniel Richman said the scale of the crime was rarely as contested as in this case. He said decisions are often shaped more by other issues, including a judge’s own impressions of the defendant, and what it would take to deter him from further crimes. Judge Kaplan has already proven to be sceptical of Bankman-Fried’s actions.

Prof Richman says it would be surprising for Judge Kaplan to render a sentence anything like the defence request. The judge believed Bankman-Fried was obstructive prior to trial, Prof Richman said. He said it was surprising that the judge believed in “effective altruism’ Since the 1980s, the US has significantly increased the length of its official recommendations for jail time for white collar criminals. In her own appeal to the judge, Bankman-Fried’s mother and a former law professor, Barbara Fried, noted the “punitive nature#38; of the US justice system.