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IPFS News Link • Courtroom and Trials

FTX's victims may get all their money back. The judge sentencing Sam Bankman-Fried might not car

•, Jacob Shamsian

According to his lawyers, FTX's customers might get all their money back.

Their dispute leaves a four-decade gap between how long prosecutors want the ex-crypto boss to serve in prison and the much lower 6 ½-year sentence his lawyers are fighting for.

The judge who will sentence Bankman-Fried on Thursday is being asked to address this vast gulf. He will have to decide how much money the convicted fraudster should be held accountable for. He is also being asked to weigh the entire circumstances of Bankman-Fried's life, including the possibility that he is neurodivergent and should be treated differently than a run-of-the-mill fraudster.

Bankman-Fried's criminal case is inextricable from the complicated bankruptcy of FTX, the cryptocurrency exchange he was convicted of using as a vehicle for his fraud.

He was arrested in December 2022, just about a month after FTX collapsed and declared insolvency under a new CEO, the seasoned executive John J. Ray III, who was tasked with shepherding the ruins of FTX through the bankruptcy court. Since the arrest, the criminal cases against Bankman-Fried and his co-conspirators — other executives who have pleaded guilty and largely cooperated with prosecutors — worked on a parallel legal track to FTX's bankruptcy proceedings.

As Bankman-Fried sat in his parents' home, under house arrest, he purported to make efforts to help out with the bankruptcy process. Offering to help identify FTX's assets, he repeatedly emailed Ray, who spurned him.

Shortly after he took over the company, Ray told the court there was "a complete absence of trustworthy financial information." Bankman-Fried complained about being shut out, insisting to journalists and friends that he could have helped locate FTX's scattered assets.

US District Judge Lewis Kaplan, who presides over Bankman-Fried's criminal case in lower Manhattan, precluded all talk of the bankruptcy proceedings from the monthlong trial. Bankman-Fried's criminal culpability rested on intent to defraud, not how much money customers actually lost, he ruled.

All jurors heard about was how Bankman-Fried used billions of dollars in customer money, not any steps he may have taken to recover it later.