Disgraced cryptocurrency wunderkind Sam Bankman-Fried is set to be sentenced Thursday following his conviction in one of the biggest financial fraud cases in history.A graduate of the Massachusetts Institute of Technology and a billionaire before the age of 30, Bankman-Fried conquered the crypto world at breakneck speed, turning FTX, a small start-up he cofounded in 2019, into the world’s second largest exchange platform.Bankman-Fried’s attorneys also pointed to statements from FTX’s current leaders expressing confidence that FTX customers and creditors would get back their money, saying in the brief, that “the harm to customers, lenders and investors is zero.”
That argument drew a scathing response from FTX Trading Chief Executive John Ray, who said ongoing recoveries of ill-gotten gains do not make up for fraud.
“That things he stole… were successfully recovered through the efforts of a dedicated group” of professionals “does not mean the things were not stolen,” Ray said in a letter to the court.
“What it means is that we got some of them back.”
The recoveries are not likely to significantly affect the sentencing, said Jacob Frenkel, an attorney at Dickinson Wright who previously worked at the Department of Justice and the Securities and Exchange Commission.
“The sentencing determinant is not about a speculative return of funds,” Frenkel said. “It is about what was the fraud when he was convicted.”
Frenkel said he would be “shocked” by a sentence under 20 years, in part because of the need for the judge to send a strong signal that fraud in the emerging cryptocurrency sector will be taken as seriously as any other.
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