Sam Bankman-Fried Threatened With 40-50 Years In Prison For Fraud Cases Of IDR 124 Trillion

Sam Bankman-Fried, former billionaire and founder of crypto exchange FTX (photo" x @sbf)

Jakarta - Sam Bankman-Fried, a former billionaire and founder of the FTX crypto exchange, was charged with stealing IDR 124 trillion (equivalent to $8 billion with an exchange rate of 1 USD = IDR 15,5901) from its now bankrupt exchange customers. Prosecutors on Friday said that Bankman-Fried should serve a prison sentence of between 40 and 50 years.

In November 2023, the jury found Bankman-Fried, 32, guilty of seven counts of fraud and conspiracy. Federal prosecutors in Manhattan said thousands of ordinary people including residents of war-torn and unstable countries had entrusted their savings to FTX.

"Bankman-Fried even now refuses to admit what he did was wrong," wrote the prosecutor in a memorandum of punishment. He's lived in recent years is one of the unrivaled greed and arrogance; ambition and rationalization; and taking risks and gambling repeatedly with other people's money."

They are looking for loots of IDR 171 trillion (equivalent to $11 billion with an exchange rate of 1 USD = IDR 15,5901), to account for the losses suffered by FTX investors and lenders of Alameda.

The former billionaire's lawyer, Marc Mukasey, told US District Judge Lewis Kaplan that a 5-1/4 to 6-1/2 year prison sentence would be appropriate. They said FTX clients would get most of their money back, and that Bankman-Fried had no intention of stealing.

Mark Botnick, a Bankman-Fried spokesman, said Mukasey would submit a response next week to the prosecutor's memorandum. Kaplan is scheduled to sentence Bankman-Fried on March 28 in Manhattan federal court. Bankman-Fried plans to appeal his sentence and verdict.

Bankman-Fried is the son of two professors of Stanford Law. A graduate from the Massachusetts Institute of Technology, Bankman-Fried worked at Wall Street before rising in popularity in the value of digital assets such as bitcoin to the net worth that Forbes magazine had previously estimated at IDR 404 trillion (equivalent to USD IDR 1 at IDR 15,5901).

His wealth disappeared in November 2022, when FTX was declared bankrupt after a wave of customer withdrawals. In their memorandum of punishment, prosecutors pointed to his privileged background and elite education as the reason he had to face a very harsh sentence.

"He knows what is considered illegal and unethical by society, but ignores it based on the destructive megalomania guided by its own values and sense of superiority," they wrote.

At his trial, three former close colleagues testified that Bankman-Fried directed them to rob FTX customers of funds to cover losses at its hedge fund Alameda Research, while he himself publicly showed himself to be a responsible guard in the volatile crypto market.

Prosecutors said Bankman-Fried also used customer funds to buy luxury real estate in the Bahamas and to donate to US politicians who might support crypto-friendly regulations.

So far, 251 US candidates and political committees have returned to the government around IDR 51 billion (equivalent to $3.3 million with an exchange rate of 1 USD = IDR 15,5901) in donations from Bankman-Fried and other FTX executives. Democratic President Joe Biden's campaign and Republican National Committee are among those who have returned the funds.

Bankman-Fried testified that he did not realize how much Alameda owed FTX until before the two failed. The trial lasted for one month. In a letter to Kaplan, Bankman-Fried's parents said their son was responsible for the mistakes that led to the collapse of FTX, and worked hard before his arrest to help recover customer money.

Bankman-Fried was arrested in December 2022 in the Bahamas, where FTX is based, and extradited to the US. He has been jailed at the Brooklyn Metropolitan Detention Center since August, when Kaplan lifted her guarantee after discovering that she most likely influenced witnesses.