Indicted founder of the now-defunct cryptocurrency exchange FTX, Sam Bankman-Fried, could be looking at an extended sentence if convicted, U.S. District Judge Lewis Kaplan cautioned on Thursday. The warning came moments before the judge rejected the 31-year-old former billionaire’s plea for temporary release during the impending fraud trial, citing flight risk concerns.
“Your client in the event of conviction could be looking at a very long sentence,” Kaplan stated during a hearing at Manhattan federal court, expressing apprehension that Sam Bankman-Fried might seek to flee should circumstances turn unfavorable.
Mark Cohen, Bankman-Fried’s legal representative, contested this notion, asserting that there was no evidence to suggest his client’s inclination to abscond. He emphasized Bankman-Fried’s voluntary consent to extradition from the Bahamas, FTX’s former base, to the United States following his arrest in December 2022.
Bankman-Fried, who maintains his innocence, is charged with seven counts of fraud and conspiracy related to FTX’s collapse in November 2022. Although he faces a maximum statutory sentence of 110 years, the actual verdict, if convicted, would be determined by Judge Kaplan, factoring in a range of considerations, and is expected to be significantly less severe.
Earlier this week, the defense requested temporary release, contending that the current detention arrangement hindered their ability to confer with their client after each trial day, crucial for preparing for subsequent witnesses and testimonies. In response, Kaplan expressed sympathy for the defense’s plight and committed to ensuring Bankman-Fried’s early arrival at court on most trial days, allowing ample time for consultations with his legal team.
Prosecutors assert that Bankman-Fried diverted billions of dollars from FTX customer deposits to offset losses at Alameda Research, a crypto-centric hedge fund under his control.
Opposing Bankman-Fried’s bid for temporary release, prosecutor Danielle Kudla informed Kaplan that Bankman-Fried had “sufficient opportunity to prepare for trial” during the 7.5 months he spent on bail at his parents’ residence in Palo Alto, California.
Kaplan ordered Bankman-Fried’s detention on August 11, having found substantial evidence of witness tampering, including the sharing of confidential writings of former Alameda CEO, Caroline Ellison, with a New York Times reporter.
Ellison, a former romantic partner of Bankman-Fried, is one of three former confidants who have pleaded guilty to fraud and are slated to testify against him. Additionally, former FTX executives Gary Wang and Nishad Singh are also slated to provide testimony.
In a revelation on Thursday, Kaplan disclosed that prosecutors had sought immunity for two additional witnesses in exchange for their cooperation, though their identities remain undisclosed.
The trial is scheduled to commence on October 3 and could extend up to six weeks.
Source: Reuters
