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March 16, 2024 by Kashif Saleem
The fall from grace of Sam Bankman-Fried, once hailed as a wunderkind of the cryptocurrency world, continues with a vengeance. On Friday, U.S. prosecutors filed a sentencing memo recommending an astonishing 40-50 years in prison for Bankman-Fried, the founder and ex-CEO of FTX.
Prosecutors strongly criticize Bankman-Fried following his conviction last November on seven counts of fraud and conspiracy linked to the dramatic downfall of FTX, a major global crypto exchange. They accuse him of deceiving investors by lying, using counterfeit documents, and unlawfully channelling millions into political campaigns.
The government urges the court to impose a sentence that underscores the remarkably serious nature of the harm to thousands of victims; prevents the defendant from ever again committing fraud; and sends a powerful signal to others who might be tempted to engage in financial misconduct that the consequences will be severe, said the prosecutors.
Bankman-Fried’s actions immensely damaged the crypto industry. Many investors lost a lot of money in the FTX collapse. Prosecutors say the total harm could be more than $1 billion. The memo claims Bankman-Fried knew his actions were illegal and thought he was above the law.
The prosecution’s sentencing proposal seeks to do more than just penalize Bankman-Fried. It intends to discourage future financial misconduct by sending a strong warning: severe consequences await those who commit such crimes. The memo emphasizes the unprecedented nature of the purported campaign finance breaches, labelling them as the most significant campaign finance violation on record.
Prosecutors Push for Sam Bankman’s Penalties
The government doesn’t just seek incarceration; it also seeks hefty financial penalties. Prosecutors propose a judgment of over $11 billion, along with the forfeiture of assets tied to Sam Bankman. This includes funds seized from his bank accounts, holdings in cryptocurrency exchanges, and proceeds from the sale of Robinhood shares.
The prosecution’s stance is harsh. In contrast, Sam Bankman’s defence team has advocated for a much lighter sentence of only 6 years. The prosecution finds this suggestion “woefully inadequate”, considering the magnitude of the alleged crimes.
The judge will decide Sam Bankman’s fate. The sentencing is on March 28th. The final sentence may not match the prosecution’s recommendation. But one thing is clear: long prison time seems very likely. This case is a stark reminder of the risks of white-collar crime in the crypto sphere. It shows how far authorities will go to hold bad actors accountable.
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