Bankman-Fried Avoids Second Trial As Prosecutors Hope For Forfeiture

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Former crypto boss Sam Bankman-Fried will not face a second trial in 2024, say prosecutors responsible for convicting him in a myriad of charges ranging from fraud to money laundering. Bankman-Fried’s cryptocurrency exchange FTX made headlines last year when it declared insolvency and the inability to return customer deposits. At the heart of the matter was FTX’s founder, and his trial saw Bankman-Fried claim innocence about the illegality of his actions.

According to prosecutors, they have decided to forgo an additional trial since most of the evidence surrounding the accusations had already been presented in the first proceeding that saw Bankman-Fried convicted on multiple counts in November. While there was little word on whether the former executive would appeal the charges at the time of conviction, media outlets now expect that an appeal might be on the horizon as well.

Bankman-Fried’s Sentencing Likely To Include Forfeiture & Reprieve For Victims Say Prosecutors

Additional details about the former FTX boss’s legal woes were present in a letter that prosecutors in Manhattan filed in federal court yesterday. Their filing came a little under two months after he was convicted by a jury in New York on all seven counts. The trial revealed key inner workings behind FTX, and saw Bankman-Fried’s former colleague and head of Alameda Research, Caroline Ellison, raise startling allegations about the nature of their relationship.

During the trial, Bankman-Fried had explained to the court that he was unaware that siphoning money out of FTX’s depositor accounts and lending it to Alameda for investment purposes was illegal. He had added that he was unaware of the scale of losses at Alameda before their impact became clear in the form of FTX’s bankruptcy.

FTX Sam Bankman-Fried SBF

In their letter, prosecutors also wrote that Bankman-Fried’s sentencing, set to take place on March 28th, would also see forfeiture and restitution for the victims. These victims are FTX’s depositors who sometimes placed their life savings into the exchange that went bankrupt. FTX’s saga was one of the biggest cases of financial impropriety in U.S. history, eclipsing the crimes of Bernie Madoff, whose Wall Street firm familiarized the broader public with the good old Ponzi scheme.

However, FTX’s misconduct and crimes were different. While Madoff had used fresh investor funds to make return payments to existing investors, FTX instead chose to invest customer funds with its sister firm, Alameda. The now convicted Bankman-Fried asserted during his trial that he had not personally pocketed any money deposited by FTX customers in their accounts.

The prosecutors added that a second trial would not increase the sentence he received, and some of the charges that he would have faced in a second trial included bribery and illicit money transmission. The trial was further complicated by the fact that the Bahaman authorities had not signed on, or provided approval to conduct a trial on these alleged violations.

His November conviction highlights the scope of Bankman-Fried’s legal troubles. This is because if he received the maximum sentence for each of the seven charges, then the former FTX boss would spend the rest of his life in prison. Five of the seven charges carry a maximum prison sentence of two decades, and the remaining two have a combined maximum sentence of a decade.

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