FTX Founder Sam Bankman-Fried, who is facing fraud charges in relation to the collapse of the cryptocurrency exchange, may be looking at a lengthy prison sentence if convicted, according to U.S. District Judge Lewis Kaplan.
The judge made this statement during a hearing on Thursday, where he denied Bankman-Fried's request for temporary release from jail during the trial. Judge Kaplan cited concerns that Bankman-Fried could be a flight risk.
Bankman-Fried's lawyer, Mark Cohen, argued that there was no evidence to suggest that his client would attempt to flee. He pointed out that Bankman-Fried had willingly consented to extradition from the Bahamas, where FTX was based, to the United States following his arrest in December 2022.
Bankman-Fried has pleaded not guilty to seven counts of fraud and conspiracy related to FTX's collapse. If convicted, he could face a maximum sentence of 110 years in prison. However, the actual sentence would be determined by Judge Kaplan, taking into account various factors, and is likely to be significantly less.
Earlier this week, Bankman-Fried's lawyers requested temporary release, arguing that they needed more time to prepare for the trial. They expressed concerns that they would not be able to speak with their client after each trial day if he was taken back to the Metropolitan Detention Center in Brooklyn. In response, Judge Kaplan expressed sympathy for their concerns and agreed to arrange for Bankman-Fried to arrive at court at 7 a.m. on most trial days to meet with his lawyers before testimony begins.
Prosecutors allege that Bankman-Fried misappropriated billions of dollars in FTX customer deposits to cover losses at Alameda Research, a hedge fund he controlled. They opposed Bankman-Fried's request for temporary release, arguing that he had ample time to prepare for trial during the 7-1/2 months he was free on bail at his parents' home in Palo Alto, California.
Bankman-Fried was taken into custody on August 11 after Judge Kaplan found evidence suggesting that he had tampered with witnesses, including sharing private writings of former Alameda CEO Caroline Ellison with a reporter from The New York Times. Ellison, who is also Bankman-Fried's former romantic partner, is one of three former members of his inner circle who have pleaded guilty to fraud and are expected to testify against him. Former FTX executives Gary Wang and Nishad Singh have also agreed to testify.
During Thursday's hearing, Judge Kaplan revealed that prosecutors had requested immunity for two additional witnesses in exchange for their testimony, but did not disclose their identities.
The trial is set to begin on October 3 and could last up to six weeks.
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