Sam Bankman-Fried FTX scam victim says life ruined | Wilnesh News

In a letter to the Department of Justice, an FTX customer who lost $4 million when the exchange filed for bankruptcy in 2022 expressed disgust at the rumor circulating that cryptocurrency exchange customers will never be compensated.

“I have gone through the scheduled claims list and calculated the exact amount stolen,” wrote the former FTX client, whose identity has been withheld by the government. “Customer liabilities total $19,722,911,002.84.”

This week, that letter Last on the desk of U.S. District Judge Lewis KaplanOn Thursday, he will inform FTX founder Sam Bankman-Fried, who has been jailed for his role in the exchange’s collapse. Sentencing proceedings will begin at 9:30 a.m. on the 26th floor of the federal courthouse in downtown Manhattan, the same location where a jury found the former cryptocurrency executive guilty of all seven criminal counts in November.

The victim wrote that his 30 years of savings had been deposited into FTX three months before its collapse, as part of a last-minute effort by prosecutors to influence Judge Kaplan before sentencing.

“My whole life is ruined,” the person wrote. “I have two young children, one of whom was born before the collapse. In addition to money, I have lost my happiness, my ability to get out of bed, and my desire to continue living. My wife is suicidal, And it’s frustrating.”

The same story was told during Bankman-Fried’s month-long criminal trial last year. Prosecutors won the case by convincing jurors that Bankman-Fried stole at least $8 billion from clients. For some, this means financial ruin.

“The prosecution included in sentencing materials the transfer of accounts from former FTX clients that recounted the devastation experienced by those who lost their money, the uncertainty of whether they would ever get any money back, and the pain of dealing with the losses. The emotional consequences of being cheated on,” said Yesha Yadav, a law professor and associate dean at Vanderbilt University. “These victim impact statements can be very powerful.”

Bankman-Fried, 32, faced a maximum sentence of more than 100 years in prison, but the government recommended a sentence of 40 to 50 years. The defense’s fishing period did not exceed 6.5 years.

For months, Judge Kaplan has been considering an appropriate punishment for Bankman-Fried’s crimes related to the collapse of his $32 billion cryptocurrency empire.

CNBC spoke with former federal prosecutors, trial lawyers and several attorneys who defend white-collar crimes to get their thoughts on what will happen on Thursday.

Bankman-Fried was found guilty of wire fraud, conspiracy to commit wire fraud against FTX clients and lenders to sister hedge fund Alameda Research, conspiracy to commit securities fraud against FTX investors and conspiracy to commit commodities fraud, and conspiracy to launder funds by defraud.

The defense team argued that Bankman-Fried’s verdict should reflect the likelihood that FTX customers will receive partial or full repayment.The likelihood of this happening has increased in recent months due to the rising value of cryptocurrencies and other assets FTX owns, such as its stakes in artificial intelligence startups man-made.

“People talk about the damages at the time of the conduct, not the recovery or potential recovery after discovery,” said the former federal and state prosecutor. david weinsteinToday, he works as a corporate compliance and white-collar defense attorney at Jones Walker. Weinstein said he expected to be sentenced to 30 to 40 years in prison.

Mark Bini, a former state and federal prosecutor and assistant U.S. attorney specializing in financial crimes, is expected to be sentenced to at least 30 years in prison.

“The standard for probation is 110 years,” said Bini, who currently represents white-collar cryptocurrency defendants at the law firm Reed Smith. on the chain Digital Asset Team. “I think the judge will probably side with probation and the government on the amount of damages and appropriate guidelines.”

Judge Kaplan, 78, is a senior judge in the Southern District of New York and has hosted Some of the biggest cases are being heard in his courts. During the four days the defendant was in court, he showed little patience with Bankman-Fried.

“Unfortunately for the SBF, some of his testimony at the trial came across as highly evasive, somewhat callous and often contradictory,” Yadav said, adding that a sentence of 20 to 25 years could serve as a Judge Kaplan offers an approach that balances the seriousness of the crime with the seriousness of the crime. Recognition of the client’s potential for recovery and future recovery.

Former federal prosecutor Neama Rahmani called Kaplan “old school” and expected a sentence of 20 to 30 years in prison.

Trey LovellLos Angeles corporate attorneys said the central factors Kaplan will consider will be the extent of the fraud and the fact that Bankman-Fried appeared to have lied under oath and showed little remorse.

“The judge will not terminate Bankman-Fried’s bankruptcy simply because FTX has recovered substantial amounts of money to offset customer losses,” Lovell said. “The judge will only focus on Bankman-Fried’s conduct while he was in charge of the company. Not the conduct of the company since he resigned as CEO.”

Bankman-Fried had one last chance to appear before a judge to express a level of remorse and a commitment to benefiting society.

“If he said that he had a chance to think about what he had done, and that he was deeply sorry for the misuse of investors’ hard-earned funds, and that he wanted to use his wisdom in this area for the benefit of the public, then he might withdraw from sentencing. Up to 20 years in prison,” Lovell said. “In court, it’s never too late to apologize. But he won’t get a big discount on his sentence for being remorseful.”

watch: Prosecutors recommended Bankman-Fried be sentenced to 40 to 50 years in prison