FTX founder Sam Bankman-Fried arrives at a courthouse in New York, on Aug. 11.EDUARDO MUNOZ/Reuters
Sam Bankman-Fried, the indicted founder of now-bankrupt cryptocurrency exchange FTX, may face a “very long sentence” if convicted at his fraud trial starting next week, the judge overseeing the case said on Thursday.
U.S. District Judge Lewis Kaplan’s comments were made just before he denied the 31-year-old former billionaire’s request to be released from jail temporarily during the trial to better help his lawyers mount his defence case. Justice Kaplan said Mr. Bankman-Fried was a flight risk.
“Your client in the event of conviction could be looking at a very long sentence,” Justice Kaplan said in a hearing in Manhattan federal court. “If things begin to look bleak … maybe the time would come when he would seek to flee.”
Mark Cohen, Mr. Bankman-Fried’s lawyer, said there was “nothing in the record” to suggest that his client would try to flee. He said Mr. Bankman-Fried had voluntarily consented to extradition from the Bahamas – where FTX was based – to the United States after his December, 2022, arrest.
Mr. Bankman-Fried has pleaded not guilty to seven counts of fraud and conspiracy stemming from FTX’s collapse in November, 2022. He faces a statutory maximum of 110 years in prison, though any sentence would be determined by Justice Kaplan based on a range of factors and he would likely get far less.
His lawyers asked Justice Kaplan for temporary release earlier this week, arguing they could not speak with him after each trial day, to prepare for the next day’s witnesses and testimony, if he were taken back to the Metropolitan Detention Center in Brooklyn, N.Y., at the end of each trial day.
Justice Kaplan said on Thursday he was sympathetic to the defense’s concerns, and would arrange for Mr. Bankman-Fried to arrive to court at 7 a.m. on most trial days to speak with his lawyers for several hours before testimony begins.
Prosecutors say Mr. Bankman-Fried stole billions of dollars in FTX customer deposits to plug losses at Alameda Research, a crypto-focused hedge fund he controlled.
They opposed Mr. Bankman-Fried’s request for temporary release. On Thursday, prosecutor Danielle Kudla told Justice Kaplan that Mr. Bankman-Fried had “ample opportunity to prepare for trial” during the 7½ months he was free on bail at his parents’ Palo Alto, Calif., home.
Justice Kaplan jailed him on Aug. 11 after finding he likely tampered with witnesses at least twice – including by sharing former Alameda chief executive officer Caroline Ellison’s private writings with a New York Times reporter.
Ms. Ellison, also Mr. Bankman-Fried’s former romantic partner, is one of three former members of his inner circle who have pleaded guilty to fraud and are set to testify against him. Former FTX executives Gary Wang and Nishad Singh have also agreed to testify.
Justice Kaplan said on Thursday that prosecutors had requested that he grant two additional witnesses immunity from being charged with crimes in exchange for their testimony. He did not identify those witnesses.
The trial starts on Oct. 3 and could last up to six weeks.