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Government exhibit in the case against former FTX CEO Sam Bankman-Fried.

Source: SDNY

While prosecutors are requesting that FTX founder Sam Bankman-Fried spend 40 to 50 years in prison for his crimes, the defense team is urging the judge to consider a sentence that’s roughly 90% shorter.

Bankman-Fried’s fate will be announced in Manhattan on Thursday morning by Judge Lewis Kaplan, who presided over the monthlong trial in November. Bankman-Fried was found guilty of seven charges tied to the collapse of crypto exchange FTX and the roughly $10 billion of customer deposits that went missing.

The hope for Bankman-Fried’s team is that Kaplan takes into account the increased likelihood that FTX customers will be able to recoup most, if not all, of the money they lost when the exchange spiraled into bankruptcy in 2022.

Lawyers representing the bankruptcy estate of FTX told a judge in Delaware last month that they expect to fully repay customers and creditors with legitimate claims. Bankruptcy attorney Andrew Dietderich, who works with FTX’s new leadership team, said “there is still a great amount of work and risk” ahead in getting all the money back to clients, but that the team has a “strategy to achieve it.”

It was a potentially dramatic change in the narrative surrounding FTX’s collapse 16 months ago. At the time, it was believed that many thousands of customers — reportedly up to a million — collectively lost billions of dollars that would be unrecoverable due to the lightly regulated and unsecured nature of the crypto industry. Those clients faced the real possibility that the vast majority of their money had evaporated, just like in other cases of hedge funds and lenders that failed during the so-called crypto winter of 2022.

Much of the government’s successful case against Bankman-Fried hinged on convincing the jury that the defendant had stolen billions of dollars worth of FTX customer money to make risky bets at Alameda.

For months, as FTX has wound its way through a Delaware bankruptcy court, new CEO John Ray III and his team of restructuring advisors have been clawing back cash, luxury property, and crypto, as well as tracking down missing assets. They’ve already collected more than $7 billion, and that doesn’t include valuables like $26 million in gifts and property to Bankman-Fried’s parents, or the $700 million handed over to K5 Global and founder Michael Kives, who invested FTX cash in companies like SpaceX that have since increased in value.

Bankman-Fried’s defense team has asked the court for a sentence in the range of 63 to 78 months. Beyond the fact that he’s a “first time, nonviolent offender,” attorneys for the FTX founder largely lean on the argument that Bankman-Fried’s risky bets paid off and the bankruptcy estate expects to fully repay FTX customers.

It’s a story that Bankman-Fried was trying to sell as he awaited trial.

“FTX US remains fully solvent,” Bankman-Fried wrote in a Substack post on Jan. 12, 2023, while he was under house arrest at his parents’ home in Palo Alto, California. He said the exchange “should be able to return all customers’ funds.”

Prosecutors recommend a prison sentence of 40-50 years for Sam Bankman-Fried in FTX fraud

One key asset in FTX’s portfolio is its stake in artificial intelligence startup Anthropic. Late last week, FTX’s bankruptcy estate struck a deal with a consortium of buyers to sell the majority of its Anthropic holdings for $884 million. Under Bankman-Fried’s leadership, FTX invested $500 million in the startup in 2021 before the boom in generative AI. The company’s valuation hit $18 billion in December 2023, which would put FTX’s roughly 8% stake at about $1.4 billion.

During Bankman-Fried’s trial, Kaplan denied the defense’s request that it be permitted to say that FTX’s investment in Anthropic was a smart bet.

‘Still guilty’

Renato Mariotti, a former prosecutor in the U.S. Justice Department’s Securities and Commodities Fraud Section, told CNBC that the more money the estate is able to recover for clients, the better for Bankman-Fried.

“If true, that is relevant and the judge is required to consider victim restitution at sentencing,” Mariotti said. “But even if victims weren’t harmed, he is still guilty of the offense.”

Mariotti said he expects the sentence to fall somewhere in between what the prosecution and defense are asking, predicting it will be “at least 20 to 25 years.”

Joseph Bankman and Barbara Fried arrive for the trial of their son, former FTX Chief Executive Sam Bankman-Fried, who is facing fraud charges over the collapse of the bankrupt cryptocurrency exchange, at Federal Court in New York City, U.S., October 26, 2023. 

Brendan Mcdermid | Reuters

In addition to the Anthropic gains, FTX customers can look at the rebound in crypto for signs of optimism. Bitcoin is trading at close to $70,000, up from less than $17,000 at the time of FTX’s collapse.

In September, the bankruptcy team released a status report showing that FTX had $3.4 billion worth of digital assets, with over $1.1 billion coming from its investment in crypto coin Solana. In the defense’s letter to the court filed last month, attorneys note a sizable increase in the value of FTX’s Solana stake, saying that as of Feb. 26, the estate saw a roughly $4 billion increase over the last six months thanks to the token’s appreciation.

Solana fits into a category of so-called “Sam coins,” a group that also includes Serum, a token created and promoted by FTX and Alameda. Solana saw a huge run-up of late, climbing more than eightfold since the end of September.

Meanwhile, FTX’s bitcoin stash, which was worth $560 million at the time of the September report, when the coin was trading at around $25,000, has seen a significant uptick as well. Bitcoin’s value has increased by around 180% since then.

For FTX customers, being made whole, according to a judge’s ruling, means getting the cash equivalent of what their crypto was worth in November 2022. In other words, they’re not seeing any of the upside of FTX’s investments or being given virtual coins that would allow them to cash out at higher valuations.

Braden Perry, who was once a senior trial lawyer for the Commodity Futures Trading Commission, told CNBC that Bankman-Fried faces at least 70 months in prison based on his base level offense, number of victims, sophisticated means and leadership role — even if there’s no monetary loss to the victims. The massive losses that were originally expected would suggest 30 years to life, Perry added.

Don’t miss these stories from CNBC PRO:

Sam Bankman-Fried set to testify at fraud trial in what experts deem a major gamble for the case

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When will Tesla cars be capable of unsupervised full self-driving (SAE Level 5)?

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May 8, 2024

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Elon Musk outlines upcoming Tesla Full Self-Driving updates

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May 8, 2024

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Elon Musk outlines upcoming Tesla Full Self-Driving updates

Tesla Full Self-Driving Beta 10.69 barrier

Elon Musk has given an update with an outline for Tesla’s upcoming Full Self-Driving (FSD) software updates.

With FSD v12 and the upcoming launch of Tesla’s dedicated Robotaxi, there’s a lot of excitement around Tesla’s self-driving effort.

Musk is again in the too-familiar position of predicting that the automaker is close to releasing a true self-driving system, but the path to get there is still far from clear.

Now the CEO is providing some new comments on the upcoming release schedule for FSD:

“12.4 has almost completely retrained models. The final touches are for comfort, as it sometimes accelerates or brakes too fast for most people’s taste.”

Tesla FSD drivers are currently on 12.3.6 and the .4 update is expected to be a bigger step change, which Musk appears to confirm by saying that Tesla “completely retrained” the models.

The CEO recently said that Tesla is no longer constrained by training compute power after bringing more capacity online, giving the FSD team more opportunities to retrain neural nets with increasingly cleaner data.

Musk then continued about Tesla’s upcoming updates:

12.5 and 12.6 are in various stages of testing. We’re getting into rare, complex situations, for example: going down a narrow, one-way road, encountering a road closure and having to reverse out to find a new route. That closure also needs to be communicated to the rest of the fleet, so you don’t get a whole bunch of Teslas stuck down a road.

There’s no timeline for these upcoming updates beyond the fact that they are currently in internal testing, but Musk did say that v12.4 could come to the Tesla fleet as soon next week.

Electrek’s Take

Again, I’ve been impressed with v12.3.3-4. I’ve just got v12.3.6, but I haven’t had time to test it yet. I plan to do that this weekend. Also, I’ve been saying that if I start seeing decent improvements with the upcoming updates, I think I’ll start to see a clearer path to Tesla finally delivering on its promise – or at least a level 4 self-driving system.

However, as usual, when talking about FSD and especially when praising the system, I think it’s important to remind everyone that the keyword in ‘Supervised Full Self-Driving’ is ‘Supervised.’ Drivers need to remain attentive at all times and ready to take control.

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Save up to $400 on NIU electric scooters starting from $210, Anker SOLIX C800 Plus, EGO Power+ pole saw, and more

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May 8, 2024

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Save up to 0 on NIU electric scooters starting from 0, Anker SOLIX C800 Plus, EGO Power+ pole saw, and more

Headlining today’s Green Deals is the NIU Mother’s Day sale that is taking up to 46% off a selection of electric scooters, like the KQi1 Pro Electric Kick Scooter at $270. It is joined by Anker’s latest C800 Plus Portable Power Station that’s fallen back to its $499 low, as well as the EGO Power+ 10-inch Telescopic LED Cut Line Indicator Pole Saw Kit at $304. Plus, more hangover Green Deals still alive and well.

Head below for other New Green Deals we’ve found today and, of course, Electrek’s best EV buying and leasing deals. Also, check out the new Electrek Tesla Shop for the best deals on Tesla accessories.

NIU Mother’s Day sale takes up to 46% off electric scooters

NIU has launched a Mother’s Day sale that is taking up to 46% off a selection of its electric scooter models through May 19. The biggest of these discounts and subsequently the most affordable of the models (aside from one for kids) is the NIU KQi1 Pro Electric Kick Scooter for $269.98 shipped. Normally fetching $499, this model saw a handful of discounts over the last year, often to its lowest rates during major sales events, with higher rates being more long-term at other retailers like Best Buy. Most recently we saw it fall to $300 during NIU’s Earth Day sale last month, with this month’s deal coming in as an even greater 46% markdown off the going rate that beats our previous mention by $30, giving you $229 in savings and landing it at the lowest price we have tracked.

Equipped with a 250W motor (450W peak) and a 243Wh battery, the NIU KQi1 Pro can reach top speeds of 15.5 MPH with a range of 15.5 miles on a single charge and it can handle up to a 14% incline. You’ll have four riding modes to choose from (E-save, sport, custom, pedestrian) as well as a dual braking system of a front drum brake with rear regenerative braking alongside pneumatic tires with “excellent shock absorbtion.” It also features a headlight, taillight, a foldable frame, a backlit LED display, and an array of smart capabilities through the NIU app, such as allowing you to lock your scooter, check your riding statistics, and even customize your scooter’s settings.

More NIU Mother’s Day discounts:

Anker’s latest SOLIX C800 Plus Portable Power Station returns to $499 low

The official Anker Amazon storefront is offering its SOLIX C800 Plus Portable Power Station for $499 shipped, after clipping the on-page $150 off coupon. Down from its $649 price tag, this is only the third official discount since the device’s release in March, which saw a similar launch discount down to the $499 low. You can get a full rundown on what to expect from our initial launch coverage, or head below. All-in-all, you’re looking at a repeat 23% markdown off the going rate, which also matches the current discount on Anker’s website as well and returns costs to the all-time lowest price we’ve seen. You’ll also find bundle options available, with it coming with a 100W or 200W solar panel for $698 or $1,048, after clipping the on-page coupons.

The SOLIX C800 Plus sports a compact 768Wh capacity with 1,600W of power output. It can fully recharge in just 58 minutes via a wall outlet, 7.2 hours via your car, or just under three hours when paired with 300W of solar panel input. It features two water-resistant LED camping lights that have three modes to choose from: a candlelight mode that covers up to 10m², a flood light mode that covers up to 20m², and a flashlight mode that covers up to 20m² – all of them lasting up to eight hours.

The lights can be easily recharged by stowing them back inside the top of the power station’s case, and they even come with a versatile retractable pole arm that can be used as a hanger, tripod, or selfie stick when not being used to extend the camping light’s reach. To cover your other devices and appliances, you’ll have five AC ports, two USB-A ports, two USB-C ports, and a car port. You’ll also be able to completely monitor and control its settings through the Anker SOLIX app, including enabling and disabling ports via Bluetooth or Wi-Fi. You can also score the same model without the camping lights for $50 less, after clipping the on-page $150 off coupon.

EGO Power+ 10-inch Telescopic LED Cut Line Indicator Pole Saw Kit now $304

Amazon is offering the EGO Power+ 10-Inch Telescopic LED Cut Line Indicator Pole Saw Kit for $304 shipped. Down from its $399 price tag, it only saw a few discounts over the last year, with four of them dropping costs to the same $299 low – the most recent being in February. Today’s deal comes in as a 24% markdown off the going rate and lands at the second-lowest price we have tracked. This 10-inch pole saw introduces an LED cut line indicator that improves visibility and accuracy when working under dark, shaded canopies and low light conditions. It’s brushless motor gives low vibrations for better control and extended life, while the 56V ARC lithium-ion battery allows it to make up to 100 cuts on a single charge. It features a telescopic carbon fiber shaft that extends out to a maximum length of 16 feet, a 10-inch bar, and 1/4-inch chain which all together can deliver smooth, precise cuts with a chain speed of 20 meters-per-second. It also has a quick-adjust handle and a shoulder strap for added comfort and control.

Spring e-bike deals!

Jackery 2000 Pro portable power station being held by handle within post for NIU electric scooter

Other new Green Deals landing this week

The savings this week are also continuing to a collection of other markdowns. To the same tune as the offers above, these all help you take a more energy-conscious approach to your routine. Winter means you can lock in even better off-season price cuts on electric tools for the lawn while saving on EVs and tons of other gear.

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