Lawyers for convicted criminal Sam Bankman-Fried are attempting to elicit sympathy for their client ahead of sentencing later this month that could see him put behind bars for the rest of his life.
The 32-year-old presided over the November 2022 collapse of Bahamas-based crypto exchange FTX, defrauding customers of billions of dollars in deposits to prop up heavy losses at his separate hedge fund, Alameda Research.
Writing to Judge Lewis Kaplan, lawyer Mark Mukasey condemned federal prosecutors’ attempts to unfairly depict Bankman-Fried as a “depraved super-villain” and warned the justice system would needlessly crush his spirit if the court acceded to their demands for a 40-50 year term in prison.
“It attributes to him dark and megalomaniacal motives that fly in the face of the record; it makes apocalyptic prophesies of [repeat offenses]; and it adopts a medieval view of punishment to reach what amounts to a death-in-prison sentencing recommendation,” Mukasey wrote on Tuesday, adding that “Sam has lost everything” already.
The trial lawyer and founding partner of Mukasey Young LLP has instead argued his client ought to receive only a fraction of that.
Mukasey went on to say his firm had not found one instance of anyone convicted of a non-violent crime released from prison after such a long time behind bars: “Perhaps because inmates suffer a two-year decline in life expectancy for each year of imprisonment.”
Convicted on the testimony of his former employee and girlfriend Caroline Ellison, among others, Bankman-Fried faces sentencing in a Manhattan federal court on March 28. The issue of character is important since the punishment will take into account his contrition and the scale of his deception.
‘The government wants to break Sam Bankman-Fried’
With his likable demeanor, beaten up Toyota Corolla and claims of altruism, Bankman-Fried attracted a number of high profile investors and celebrities including NFL quarterback Tom Brady. Just six weeks before FTX filed for bankruptcy, Sequoia Capital published a glowing tribute to “SBF”, in which the renowned venture capital firm praised his “savior complex”. (It has since been removed but can still be read via archived pages.)
Few knew at the time that Alameda Research had secretly been plundering FTX customer deposits to cover speculative bets that went south using its own reserves of FTT, the native exchange token issued by FTX, as a form of collateral.
When news leaked Alameda’s balance sheet was built from sand, Binance founder Changpeng Zhao rushed to liquidate his holdings in FTX’s unbacked cryptocurrency. The move sparked a panic, the value of FTT plummeted and the end drew near for Alameda, FTX and Bankman-Fried.
The demise of Bankman-Fried’s FTX in November 2022 marked the peak of the crypto winter following a summer of scandals starting with the implosion of Terraluna’s algo-backed stablecoin, the failure of crypto lender Celsius, and the managing partners of Three Arrows Capital running from the law.
“Hellbent on portraying [him] as a monster,” Mukasey wrote on Tuesday, “the government wants to break Sam Bankman-Fried.”