U.S. prosecutors are seeking a severe 40-50 year prison sentence for Sam Bankman-Fried, the founder and former CEO of FTX, after his conviction on fraud and conspiracy charges linked to the collapse of the once-major crypto exchange. Prosecutors allege that Bankman-Fried engaged in deceitful practices, including lying to investors, sharing fake documents, and illegally funneling millions of dollars into the political system.
The Department of Justice’s Southern District of New York office argues that a substantial sentence is necessary to reflect the gravity of the harm caused to thousands of victims, deter future financial misconduct, and prevent Bankman-Fried from committing fraud again. The requested penalty also includes a forfeiture exceeding $11 billion, with prosecutors deeming it a conservative sum considering the scale of the fraud.
Efforts to recover funds have targeted Bankman-Fried’s political contributions, labeled as “the largest-ever campaign finance offense,” with over $3 million already returned by candidates. Prosecutors cite comparisons to other high-profile financial criminals, notably Bernie Madoff, who received a 150-year sentence for his $13 billion Ponzi scheme.
Bankman-Fried’s defense team had proposed a 6-year sentence, which prosecutors dismissed as “woefully inadequate” given the severity of the crimes. Bankman-Fried was convicted on seven counts of fraud and conspiracy in November, with sentencing scheduled for March 28.
Federal prosecutors accused Bankman-Fried of running a multiyear scheme that defrauded customers and lenders on the financial condition of FTX and Alameda from 2019 through November 2022. He is also accused of violating federal campaign finance laws and misleading the Federal Election Commission by funneling $70 million in illegal contributions to political candidates.
Bankman-Fried is further accused of misappropriating $8 billion worth of customer assets for personal use, including buying extravagant real estate, trading cryptocurrencies, investing in other companies, and making tens of millions of dollars in political donations. Prosecutors have described his actions as “a fraud of epic proportions” and one of the largest and most “brazen” frauds in recent memory.
Bankman-Fried, who was extradited from the Bahamas to the United States in December, has been granted bail on a $250 million recognizance bond secured by his family home in California. Two of Bankman-Fried’s close allies, Alameda CEO Caroline Ellison and FTX co-founder Gary Wang, have pleaded guilty to criminal charges and agreed to cooperate fully with the government.
