Sam Bankman-Fried deserves 40 to 50 years in prison for "historic" cryptocurrency fraud, prosecutors say

Federal prosecutors asked a New York judge on Friday to sentence FTX founder Sam Bankman-Fried to between 40 and 50 years in prison for cryptocurrency crimes they described as a "historic fraud."

Prosecutors made the request as they submitted their presentence recommendations to a federal judge who will sentence the man who at one time dazzled the cryptocurrency world with his promotional skills, including his access to famous people willing to promote his businesses.

Bankman-Fried, 32, is scheduled to be sentenced in Manhattan federal court on March 28 following his November conviction on fraud and conspiracy charges.

Prosecutors say he cost customers and investors in FTX and its related companies at least $10 billion from 2017 through 2022.

He was extradited to the United States in December 2022 from the Bahamas after his companies collapsed a month earlier. Originally permitted to remain at home with his parents in Palo Alto, California, he was jailed last year weeks before his trial after Judge Lewis A. Kaplan concluded that he had tried to tamper with trial witnesses.

In their presentence submission, prosecutors described Bankman-Fried's crimes as "one of the largest financial frauds in history, and what is likely the largest fraud in the last decade."

"The defendant victimized tens of thousands of people and companies, across several continents, over a period of multiple years. He stole money from customers who entrusted it to him; he lied to investors; he sent fabricated documents to lenders; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials. Each of these crimes is worthy of a lengthy sentence," they wrote.

Prosecutors invoke Bankman-Fried's political donations, bribes

They said his "unlawful political donations to over 300 politicians and political action groups, amounting to in excess of $100 million, is believed to be the largest-ever campaign finance offense."

And they said his $150 million in bribes to Chinese government officials was one of the single largest by an individual.

"Even following FTX's bankruptcy and his subsequent arrest, Bankman-Fried shirked responsibility, deflected blame to market events and other individuals, attempted to tamper with witnesses, and lied repeatedly under oath," prosecutors said, citing his testimony at trial.

FTX's bankruptcy in November of 2022 cast a cloud over the entire crypto industry, as the sudden collapse of other major industry players vaporized billions in client wealth.

"So many people believed in him, he was a genius," Natalie Tien, a former FTX employee, told CBS News last year. 

Tien said attending the trial of her former boss was cathartic after experiencing months of confusion and depression when his empire collapsed and she too "lost a lot of money." 

Bankman-Fried's lawyers attacked previous sentence recommendation

Two weeks ago, Bankman-Fried's lawyers attacked a probation office recommendation that their client serve 100 years in prison, saying a sentence of that length would be "grotesque" and "barbaric."

They urged the judge to sentence Bankman-Fried to just a few years behind bars after calculating federal sentencing guidelines to recommend a term of five to 6 1/2 years in prison.

They cited their client's medical conditions, which include autism, as well as his goals to improve the world through his now-defunct crypto exchange, according to the Wall Street Journal. 

"Sam is not the 'evil genius' depicted in the media or the greedy villain described at trial," his lawyers wrote. "Sam is a 31-year-old, first-time, nonviolent offender, who was joined in the conduct at issue by at least four other culpable individuals, in a matter where victims are poised to recover —were always poised to recover— a hundred cents on the dollar."

In:
• Sam Bankman-Fried
• Cryptocurrency