Bankman-Fried Could Face ‘Very Long Sentence’ If Convicted, Judge Says

By Luc Cohen

NEW YORK (Reuters) – Sam Bankman-Fried, the indicted founder of the now-bankrupt cryptocurrency exchange FTX, could face a "very long sentence" if found guilty at his upcoming fraud trial, according to the presiding judge on Thursday.

U.S. District Judge Lewis Kaplan made these remarks just before denying the 31-year-old former billionaire’s request for temporary release from jail during the trial. Kaplan cited Bankman-Fried as a flight risk.

"Your client, in the event of conviction, could be looking at a very long sentence," Kaplan stated during a hearing in Manhattan federal court. "If things begin to look bleak… there may come a time when he would seek to flee."

Bankman-Fried’s attorney, Mark Cohen, contended that there is "nothing in the record" to suggest his client would attempt to escape. He highlighted that Bankman-Fried voluntarily consented to extradition from the Bahamas, where FTX was headquartered, following his arrest in December 2022.

Bankman-Fried has pleaded not guilty to seven counts of fraud and conspiracy in connection with FTX’s collapse in November 2022. He faces a statutory maximum sentence of 110 years in prison; however, any actual sentence would be determined by Judge Kaplan, who would consider various factors and likely impose a significantly shorter term.

Earlier in the week, Bankman-Fried’s legal team requested temporary release, arguing that they needed to consult with him after each trial day to prepare for the following day’s witnesses and testimony. They noted the challenge of doing so if he were returned to the Metropolitan Detention Center in Brooklyn each evening.

Judge Kaplan expressed some understanding of the defense’s concerns, assuring that Bankman-Fried would be brought to court at 7 a.m. on most trial days to confer with his attorneys for several hours before testimony begins.

Prosecutors accuse Bankman-Fried of misappropriating billions of dollars from FTX customer deposits to cover deficits at Alameda Research, a crypto hedge fund he oversaw. They opposed his request for temporary release, asserting that he had "ample opportunity to prepare for trial" during the more than seven months he was free on bail at his parents’ home in Palo Alto, California.

Bankman-Fried was incarcerated on August 11 after the judge determined he likely tampered with witnesses at least twice, including sharing private writings of former Alameda CEO Caroline Ellison with a reporter.

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

On Thursday, Judge Kaplan mentioned that prosecutors had asked for two additional witnesses to be granted immunity from prosecution in exchange for their testimony, although he did not specify who they were.

The trial is set to commence on October 3 and may last up to six weeks.