Sam Bankman-Fried, the founder and former CEO of the bankrupt cryptocurrency exchange FTX, is facing an eight-count federal indictment that could see him sentenced to up to 115 years in prison if he is convicted and given the maximum sentence.
That the 30-year-old, who was the public face of the crypto industry, is at risk of spending the rest of his life in prison underscores the seriousness of the charges levied against him by prosecutors with the U.S. Attorney’s Office for the Southern District of New York.
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“My sense is he’s going to face some pretty serious time here,” says Nick Akerman, a former assistant U.S. Attorney who prosecuted white-collar crime for the Southern District of New York.
Akerman predicts a 10-year sentence, if not significantly more—but that it could vary based on the details revealed 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: wire fraud on customers and lenders, conspiracy to commit commodities and securities fraud, one count of money laundering, one count related to campaign finance laws.
A conviction for a single count of wire fraud is punishable by up to 20 years in prison, according to federal statute.
The federal case, unsealed on Tuesday, alleges that Bankman-Fried duped both customers and investors to funnel billions of dollars into his other ventures, including his trading firm, Alameda Research, and that he was heavily responsible for FTX’s collapse.
Bankman-Fried resigned from his position at FTX in November when the company filed for bankruptcy protection. Lawyers have estimated that the company owes money to more than one million people and organizations. Its top 50 creditors alone are owed $3.1 billion.
Additionally, the Securities and Exchange Commission (SEC) alleges Bankman-Fried misled investors and the Commodity Futures Trading Commission (CFTC) also charged him with fraud.
Bankman-Fried has said in public statements, including in congressional testimony he was planning to give Tuesday—the day after his arrest—that he was unaware of the extent of the problems and that he did not mean to commingle customer funds with Alemeda’s investments.
Akerman says the scale of the alleged crime—a multibillion-dollar fraud committed against customers and lenders across multiple years—will contribute to the length of any prison sentence Bankman-Fried gets if prosecutors can prove their case.
Akerman explains that Tuesday’s indictment was fairly “bare bones,” but that there will probably be a superseding indictment in the future that will name co-conspirators and further details. “This is just the tip of the iceberg,” Ackerman predicts. “There’s a lot of people involved in this thing.”
Bankman-Fried is, of course, deemed innocent unless he is convicted. And there are signs he is already preparing a robust legal defense. His parents, both law professors at Stanford University, have been with Bankman-Fried since November and attended his initial hearing Tuesday in the Bahamas.