Lawyers for fallen cryptocurrency billionaire Sam Bankman-Fried are begging a federal judge to spare their client from what they call a “grotesque” and “barbaric” potential century-long prison sentence for fraud convictions related to the collapse of his FTX digital asset exchange.
In a sentencing memo filed Tuesday night in Manhattan federal court, Bankman-Fried’s attorneys argued that the disgraced entrepreneur does not deserve to spend the rest of his life behind bars and proposed a term of five to six-and-a-half years instead.
Defense Attorneys Call Recommended Sentence “Barbaric”
The plea comes in response to a pre-sentencing report filed last week by federal probation officials that calculated sentencing guidelines recommending up to 110 years imprisonment for the 31-year-old Bankman-Fried.
“That recommendation is grotesque,” wrote lead defense attorney Marc Mukasey in the memo. He called the proposed century-long term “irrational” and “barbaric” for a nonviolent offender like his client.
Mukasey insisted the appropriate sentence should consider factors like Bankman-Fried’s history of “charitable works” through his BUILD foundation and his willingness to assist authorities investigating FTX’s demise.
The lawyer also noted that victims of the FTX fraud, mainly customers and creditors, stand likely to recover most funds lost when the $32 billion crypto exchange went bankrupt in November 2022.
Bankman-Fried Faces March Sentencing After Fraud Conviction
Bankman-Fried, known as SBF in crypto circles, was convicted in December on charges he defrauded investors and customers out of billions of dollars while diverting their money to fund lavish real estate purchases, political donations, and a risky hedge fund.
He built FTX into one of the largest crypto exchanges before it all came crashing down when a liquidity crisis prompted the equivalent of a bank run. The company filed for bankruptcy on November 11.
Now awaiting formal sentencing on March 28, Bankman-Fried could still theoretically receive the maximum 110 years under federal guidelines. But legal experts say white-collar criminals rarely get such lengthy terms in reality.
Judge Has Broad Discretion Over Final Prison Sentence
The ultimate decision rests in the hands of Judge Lewis A. Kaplan, who presided over SBF’s trial and will weigh arguments from both sides before settling on an appropriate sentence.
In the memo, Bankman-Fried’s legal team disputed the methodology used by probation officials to calculate losses to victims exceeding $8 billion. The lawyers argued the actual harm was far lower based on the likely creditor recoveries in bankruptcy court.
The government will likely counter that intended losses should be measured based on the entirety of monies placed at risk by Bankman-Fried’s fraudulent scheme, not just the final shortfall.
Kaplan maintains broad discretion in fashioning a sentence, regardless of mathematical loss estimates. Factors like acceptance of responsibility, risk of recidivism, and societal goals of punishment and deterrence also come into play.
Young Crypto Mogul Portrayed as Naive But Well-Meaning
In their own portrayal, defense lawyers cast Bankman-Fried as a well-meaning but inexperienced entrepreneur who made terrible mistakes but never acted with malicious intent.
The memo described SBF as a “devoted altruist” who was genuinely shocked by FTX’s downfall and remains willing to cooperate with investigators. It states he is not the cunning criminal mastermind bent on deception as painted by prosecutors.
Instead, the lawyers argue Bankman-Fried got caught up in problems he did not fully grasp as FTX expanded too rapidly after launching in 2019. They say he resorted to unethical means of propping up his trading empire only out of desperation to protect customers and investors.
But the judge may take a more skeptical view of those claims after sitting through the month-long trial that meticulously documented Bankman-Fried’s lies to investors and regulators as FTX spiraled toward ruin. He could decide examples must be made out of powerful leaders whose reckless actions cause such epic collapses.
The sentencing memo kicked off a final phase of legal wrangling before the once high-flying crypto billionaire and Democratic mega-donor learns his fate. Sam Bankman-Fried now can only wait to see how long he will spend in federal prison, with his lawyers angling for the lowest sentence possible after his shocking downfall.
