Bankman-Fried Prosecutors Call Off Second Trial

Disgraced cryptocurrency wunderkind Sam Bankman-Fried will not face another criminal trial.

The FTX founder, already convicted on fraud and conspiracy charges connected to the collapse of his exchange in 2022, had been scheduled for another trial later this year on charges related to conspiracy to commit bank fraud and bribe foreign officials.

However, prosecutors now say that trial would “delay” a “timely and just resolution of the case,” Bloomberg News reported Friday (Dec. 29), citing a letter from the U.S. Attorney’s office.

Bankman-Fried, 31, was convicted in November on seven counts of fraud and conspiracy, following a trial in which the prosecution painted him as the mastermind behind the theft of billions in customer funds. 

“He faces a maximum sentence of over a hundred years in prison if given the full time for all counts for his starring part in orchestrating one of the largest financial frauds in American history,” PYMNTS wrote at the time.

“Wall Street investment scammer Bernie Madoff, for his part, was sentenced to 150 years.”

The letter to Judge Lewis Kaplan — who presided over the first trial — said that the Bahamas, which extradited Bankman-Fried for his initial trial, hasn’t yet agreed to allow the U.S. to try him on other charges.

That agreement is necessary according to treaty obligations, but Bankman-Fried had filed a challenge in 2023, leading prosecutors to divide up the trials. 

In addition, prosecutors say a bulk of the evidence offered in the second trial had been presented during the first, and the judge can weigh that evidence at sentencing in March.

“Proceeding with sentencing in March 2024 without the delay that would be caused by a second trial would advance the public’s interest in a timely and just resolution of the case,” the government’s letter says.

Meanwhile, Bankman-Fried’s former company filed a proposal last month that would permit the exchange to exit bankruptcy. 

The proposal would distribute billions in cash to creditors and customers after most of FTX’s cryptocurrencies are liquidated.

The proposal would determine the value of claims by customers and creditors based on asset prices at the time FTX sought bankruptcy protection last year. However, that means that the plan could cost creditors millions if approved.

That’s because while bitcoin — the most popular cryptocurrency — was valued at $17,000 when FTX declared bankruptcy, it has spent weeks trading at above $40,000.