Fallen crypto star Bankman-Fried may face ‘very long sentence’ if convicted, judge says

NEW YORK – Sam Bankman-Fried, the indicted founder of now-bankrupt cryptocurrency exchange FTX, may face a “very long sentence” if convicted at his fraud trial starting next week, the judge overseeing the case said on Thursday.

US District Judge Lewis Kaplan’s comments came just before he denied the 31-year-old former billionaire’s request to be released from jail temporarily during the trial to better help his lawyers mount his defence case. The judge said Bankman-Fried was a flight risk.

“Your client, in the event of conviction, could be looking at a very long sentence,” Judge Kaplan said in a hearing in Manhattan federal court. “If things begin to look bleak... maybe the time would come when he would seek to flee.”

Mr Mark Cohen, Bankman-Fried’s lawyer, said there was “nothing in the record” to suggest that his client would try to flee. He said Bankman-Fried had voluntarily consented to extradition from the Bahamas, where FTX was based, to the United States after his December 2022 arrest.

Bankman-Fried has pleaded not guilty to seven counts of fraud and conspiracy stemming from

FTX’s collapse in November 2022.

He faces a statutory maximum of 110 years in prison, although any sentence would be determined by Judge Kaplan based on a range of factors and he would likely get far less.

Bankman-Fried’s lawyers asked the judge for temporary release earlier this week, arguing that they could not speak to him to prepare for the next day’s witnesses and testimony if he were taken back to the Metropolitan Detention Centre in Brooklyn at the end of each trial day.

Judge Kaplan said on Thursday he was sympathetic to the defence’s concerns, and would arrange for Bankman-Fried to arrive in court at 7am on most trial days to speak to his lawyers for several hours before testimony begins.

Prosecutors say Bankman-Fried stole billions of dollars in FTX customer deposits to plug losses at Alameda Research, a crypto-focused hedge fund he controlled.

They opposed Bankman-Fried’s request for temporary release. On Thursday, prosecutor Danielle Kudla told Judge Kaplan that Bankman-Fried had “ample opportunity to prepare for trial” during the 7½ months he was free on bail at his parents’ home in Palo Alto, California.

Judge Kaplan

jailed him on Aug 11

after finding that he likely tampered with witnesses at least twice – including by sharing former Alameda chief executive officer Caroline Ellison’s private writings with a New York Times reporter.

Ellison, also Bankman-Fried’s former romantic partner, is one of three former members of his inner circle who have pleaded guilty to fraud and are set to testify against him. Former FTX executives Gary Wang and Nishad Singh have also agreed to testify.

The trial starts on Oct 3 and could last up to six weeks. REUTERS