New letters attached to Sam “SBF” Bankman-Fried’s criminal court case provide details on the days following FTX’s collapse and initial efforts to recover funds.
The legal counsel for the former FTX CEO filed a memo in the U.S. District Court in Manhattan on Feb. 27 requesting a prison sentence of less than seven years on multiple counts of fraud and money laundering. Along with the sentencing submission, a total of 29 supportive letters were attached for Judge Lewis Kaplan’s review.
At least two letters specifically address the earliest efforts to recover FTX’s customer funds after the November 2022 bank run that led to the exchange’s bankruptcy.
One of the documents is written by Daniel Chapsky, a former data scientist at Meta and head of data science at FTX. According to him, Bankman-Fried ignored early advice from his parents’ to assemble a legal defense team in case he was prosecuted:
“He worked almost around the clock, to the point of exhaustion. [...] He had no patience for conversations about defending himself. Instead, he offered whatever help he could give to both sets of bankruptcy professionals.”
Support letters are typically intended to highlight a defendant’s good character and positive attributes. In Bankman-Fried’s case, the documents focusion his cooperation with the FTX bankruptcy state and his altruistic philosophy, among other things.
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According to Chapsky, Bankman-Fried’s early cooperation saved hundreds of millions of dollars for FTX bankruptcy:
“I will say only that having worked closely with Sam for significant parts of those five weeks and observed his actions, the data speaks louder than words. By the time all other members of FTX founding team and senior leadership had given up on helping customers and switched to protecting themselves, Sam kept trying to help.”
A separate document by Jeremy Brest, founder and direct manager of Framework Capital Solutions, describes negotiations with an anonymous client seeking to acquire FTX assets in November 2022.
“I recommended my client attempt to acquire significant portion of the FTX assets, and eventually, they did propose an investment in a process that was unfortunately thwarted by the bankruptcy team,” said Brest, noting that the former CEO was focused on “generating value” for FTX clients.
FTX’s new management recently disclosed plans to fully repay its creditors based on the prices of crypto assets at the time of bankruptcy.
A jury found Bankman-Fried guilty of seven charges in his criminal trial on Nov. 3, 2023, including wire fraud, wire fraud conspiracy, securities fraud, commodities fraud conspiracy and money laundering conspiracy. His sentencing is expected on March 28, where he will face a maximum sentence of 110 years in prison.
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