US prosecutors do not plan to conduct a second trial against Sam Bankman-Fried, who was convicted last month of stealing from customers of his now-bankrupt FTX cryptocurrency exchange.
Key points:
- Bankman-Fried had faced six additional charges that had been severed from his first trial
- These include campaign finance violations, conspiracy to commit bribery, and conspiracy to operate an unlicensed money transmitting business
- Prosecutors said a second trial would not effect how much time he could face in prison
In a letter filed on Friday night in federal court in New York, prosecutors said the “strong public interest” in a prompt resolution of their case against the 31-year-old former billionaire outweighed the benefits of a second trial.
Prosecutors said that interest “weighs particularly heavily here,” given that Bankman-Fried’s scheduled March 28, 2024 sentencing will likely include orders of forfeiture and restitution for victims of his crimes.
Jurors on November 2 convicted Bankman-Fried on all seven fraud and conspiracy counts he faced.
Prosecutors had accused him of looting $US8 billion ($11.7 billion) from FTX customers out of sheer greed.
Lawyers for Bankman-Fried declined to comment.
Bankman-Fried had faced six additional charges that had been severed from his first trial, including campaign finance violations, conspiracy to commit bribery, and conspiracy to operate an unlicensed money transmitting business.
He had been extradited in December 2022 from the Bahamas, where FTX was based, to face the seven earlier charges.
The Bahamas has yet to grant its consent for a trial on the remaining charges, however, leaving the timetable uncertain, prosecutors said.
The Massachusetts Institute of Technology (MIT) graduate has been jailed since August, when US District Judge Lewis Kaplan revoked his bail after concluding that Bankman-Fried had likely tampered with prospective trial witnesses.
Bankman-Fried facing decades in prison
Bankman-Fried’s verdict came nearly one year after FTX filed for bankruptcy, erasing his once-$US26 billion personal fortune in one of the fastest collapses of a major participant in US financial markets.
Bankman-Fried could face decades in prison when he is sentenced by Judge Kaplan in Manhattan.
Prosecutors said much of the evidence that could be offered at a second trial was already presented at the first trial.
They also said a second trial would not effect how much time Bankman-Fried could face in prison under recommended federal guidelines, because Judge Kaplan could consider all of Bankman-Fried’s conduct when sentencing him for the counts on which he was convicted.
Bankman-Fried is expected to appeal his conviction.
He testified at trial that he made mistakes running FTX, including by not creating a team to oversee risk management, but did not steal customer funds.
Bankman-Fried also said he thought the borrowing of money from FTX by his crypto-focused hedge fund Alameda Research was permissible, and that he did not realise how precarious their finances had become until shortly before both collapsed.
2023 and the fallout from the collapse of crypto
If 2022 was the year that the cryptocurrency industry collapsed, 2023 was the year of the spillover from that fall.
The year’s headlines from crypto were dominated by convictions and legal settlements as Washington regulators adopted a much more aggressive stance toward the industry.
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Weeks after Bankman-Fried was convicted, the founder of Binance — Chengpeng Zhao — agreed to plead guilty to money laundering charges as part of a settlement between US authorities and the exchange.
Among the other crypto heavyweights that met legal trouble this year were Coinbase, Gemini and Genesis.
Yet speculation that crypto may gain more legitimacy among investors helped more than double the price of bitcoin.
After years of delays, US regulators are eventually expected to approve a bitcoin exchange-traded fund.
Whether that will prove sufficient to sustain bitcoin’s rally over the long run remains to be seen.
Reuters/ABC