The first court hearing in the case of the former head of the collapsed FTX, Sam Bankman-Fried (SBF), will take place in early October. While the founder of the crypto exchange is in prison and preparing a line of defense, lawyers shared their opinions regarding the upcoming hearings in a conversation with CoinDesk.
Charges and evidence
Prosecutors face the difficult task of proving SBF’s direct guilt and convincing the jury of this. The defendant will defend himself, refuting the authorities’ arguments.
In total, Bankman-Fried faces seven charges:
- committing wire fraud against FTX customers;
- conspiracy to defraud FTX customers;
- committing wire fraud against Alameda Research creditors;
- conspiracy to defraud Alameda Research creditors;
- conspiracy to commit securities fraud against FTX investors;
- conspiracy to commit product fraud against FTX customers;
- Conspiracy to launder money to conceal the proceeds of wire fraud against FTX customers.
Of these, only the first and third are “essential.” That is, the US Department of Justice claims that Bankman-Fried personally and knowingly committed crimes on these counts.
Law firm Withersworldwide lawyer Martin Auerbach noted that for the remaining charges of “conspiracy,” the prosecutor’s office will have to prove the involvement of other people. That is, at least two people must agree and openly act with the intent to deceive.
Sending emails or otherwise attempting to defraud people using online tools falls under the state’s definition of wire fraud, Auerbach said.
Kramer Levin law firm partner Jordan Estes noted that all of the fraud allegations in this case are similar and involve SBF allegedly lying to clients or creditors. The Justice Department will likely try to simplify the case as much as possible so that the jury will focus on the lies, the lawyer added.
If the Bankman-Fried team is able to prove that the defendant lacked malicious intent, he could be found not guilty on several counts. Thus, the task of lawyers becomes to refute the arguments of the Ministry of Justice.
Perhaps the former head of FTX will try to refer to the advice of lawyers that guided him when making management decisions. In that case, he had every reason to believe that he did nothing wrong, Estes explained.
The defense also hopes to bring in expert witnesses to refute some of the testimony.
115 years for Sam
The Justice Department noted that federal guidelines carry sentences of up to 20 years in prison for wire fraud, conspiracy and money laundering charges. The other charges against SBF carry a maximum sentence of five years each.
In total, the maximum sentence for the original claims against Sam Bankman-Freed will be approximately 115 years.
However, lawyer Kramer Levin believes that the head of FTX will serve much less time, since such charges are usually grouped.
Before the judge imposes a sentence, the U.S. Probation and Pretrial Services System will prepare a recommendation. They will familiarize themselves with the minutes of the meeting and the biography of Bankman-Fried, and may also take testimony from him.
“There is no mandatory minimum. […] I think there is a way to simplify this case for both the prosecution and the defense. This is what the trial will ultimately come down to,” Estes said.
Most experts agree that SBF will spend 10 to 20 years in prison, given the severity of the charges, the clients’ losses and the publicity of the case.
Let us remind you that Bankman-Fried was charged with 13 criminal offenses. Prosecutors later dropped charges of financing certain politicians as part of a deal with the defense. The FTX founder pleaded not guilty to any of the charges, including bribery of a Chinese official.
Earlier, journalists found out the role of SBF’s parents in building the FTX business empire. After this, representatives of the platform filed a lawsuit against them.
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