by Sam Bankman-Fried, founder and former CEO of bankrupt cryptocurrency exchange FTX, is facing an eight-point federal indictment where he could face up to 115 years in prison if found guilty and serving the maximum sentence.
The fact that the 30-year-old, the public face of the crypto industry, risks spending the rest of his life in jail underscores the seriousness of the charges brought against him by the US Southern District Attorney’s Office and prosecutors. of New York.
“I think he’s going to have a pretty serious time here,” says Nick Akerman, a former assistant U.S. Attorney General who prosecutes white-collar crimes for the Southern District of New York.
Akerman envisions a 10-year prison sentence, if not significantly more – but says that could change based on details that come out later in the investigation. Akerman is not involved in the case, but his assessment is based on the allegations in the public indictment.
Bankman-Fried faces charges of: conspiracy on customers and lenders for electronic fraud, commodity and securities fraud, once money laundering, once campaign finance laws.
Under federal law, a single radio fraud conviction is punishable by up to 20 years in prison.
The federal lawsuit revealed Tuesday alleges that Bankman-Fried deceived customers and investors alike, pouring billions of dollars into his other ventures, including trading firm Alameda Research, and that he was largely responsible for the collapse of FTX.
Bankman-Fried resigned from his position at FTX in November when the company filed for bankruptcy protection. Lawyers estimate that the company owes more than a million dollars to individuals and organizations. Only the 50 largest creditors have $3.1 billion in debt.
Additionally, the Securities and Exchange Commission (SEC) alleges that Bankman-Fried misled investors, and the Commodity Futures Trading Commission (CFTC) also accused him of fraud.
In public statements, including a congressional statement he plans to give on Tuesday, the day after his arrest, Bankman-Fried said he was unaware of the extent of the problems and did not intend to mix client funds with Alemeda’s investments.
Akerman says the scale of the alleged crime—a multibillion-dollar scam committed over several years against customers and lenders—will add to the length of the prison sentence that Bankman-Fried faces if prosecutors prove his allegations.
Akerman explains that Tuesday’s indictment is pretty “bare bones” but will likely replace an indictment that will feature co-conspirators and other details in the future. “This is just the tip of the iceberg,” Ackerman guesses. “There are a lot of people involved in this incident.”
Of course, Bankman-Fried is presumed innocent unless convicted. And there are already signs that he is preparing a strong legal defense. His parents, both law professors at Stanford University, have been with Bankman-Fried since November and attended his first hearing in the Bahamas on Tuesday.
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