Bankman-Fried Lawyers Blast ‘Barbaric’ 100-Year Sentence Recommendation

Attorneys for convicted cryptocurrency fraudster Sam Bankman-Fried say their client is “selfless,” “altruistic” and “misunderstood.”

In a final bid for leniency, lawyers for the FTX founder are calling for a sentence of five a-and-a-half to six-and-a-half years, the Financial Times (FT) reported Wednesday (Feb. 28), citing court documents.

Bankman-Fried, convicted in November 2023 of fraud and money laundering “is a “first-time, non-violent offender . . . in a matter where victims are poised to recover — were always poised to recover — a hundred cents on the dollar,” the filing said.

The lawyers also criticized the 100-year sentence proposed by probation officers as “grotesque” and “barbaric” and said their client’s autism spectrum disorder makes him “uniquely vulnerable in a prison population.”

Bankman-Fried, 31, was accused of pilfering FTX depositor accounts to make risky investments, purchase property and pay off loans, burning an $8 billion hole in the company’s balance sheet when it collapsed in November 2022, sending shockwaves through the larger crypto world.

His sentencing is scheduled for March 28, with prosecutors asking for harsh penalties in what has been described as one of the largest white-collar fraud cases ever recorded. But as the FT notes, his lawyers claim Bankman-Fried has been wrongly compared to figures like Bernie Madoff, who died while serving a 150-year prison sentence after being convicted of the largest Ponzi scheme in U.S. history.

Instead, the attorneys said, Bankman-Fried should be thought of like Michael Milken, the “junk bond king” who spent two years in prison for security law violations and then went onto serve as a “tremendous force for good in the world” because of his charitable works. They also said their client’s lack of experience should be taken into account.

“He was making thousands of business decisions a day, for the first time, in an immature and undisciplined cryptocurrency market, surrounded only by a group of similarly inexperienced (albeit very bright) twenty-somethings,” the filing said. ”He was, in essence, flying by the seat of his cargo shorts.”

As for what the victims in the FTX collapse will recover, it may not be as clear cut as what Bankman-Fried’s lawyers claim.

Last month, Andrew Dietderich, representing the company in its bankruptcy case, said FTX plans to pay back customers and creditors who can show their losses, but noted this was a goal, not a guarantee.

And those customers will be paid based on what they were owed at the time FTX filed bankruptcy, a notion protested by investors who say that tying their claims to 2022 crypto prices prevents them from realizing a recent rally in crypto prices.

As for resurrecting the exchange itself?

“The costs and risks of creating a viable exchange from what Mr. Bankman-Fried left in the dumpster were simply too high,” Dietderich said.