Sentenced to 25 Years in Prison, FTX Crypto Company Founder Sam Bankman-Fried Appeals

A Manhattan federal court judge ordered Sam Bankman-Fried to pay more than USD 11 billion or around IDR 174.68 trillion (exchange rate IDR 15,880.10 per USD) as part of his sentence for defrauding customers and investors in the failed FTX crypto exchange.

Experts say this amount will likely leave him financially deficient for the rest of his life.

“This forfeiture was designed to ensure that if Sam Bankman-Fried made any money, it was not his but rather the government's and the victims'. He would never be able to collect the funds in his lifetime, and the forfeiture could not be eliminated through bankruptcy,” said the former federal prosecutor , Mitchell Epner quoted from CNN, Sunday (30/3/2024).

Courts have discretion in determining forfeiture amounts, but they are largely based on how much money the defendant earned in their crime, not how much they can be expected to pay.

In their sentencing memorandum earlier this month, federal prosecutors outlined their reasons for seeking the forfeiture of $11 billion. They say the $8 billion represents how much Bankman-Fried earned from his network of fraud and conspiracy to defraud FTX customers, and property involved in his conspiracy to launder the proceeds.

Then another USD 1.72 billion represents the amount FTX obtained from investors under false pretenses, and USD 1.3 billion represents the money that cryptocurrency trading company Bankman-Fried paid to lenders.

In contrast to restitution, where money from confiscated assets is given directly to the victim, money from confiscation is taken by the government and absorbed into the US Treasury. It's unclear how much Bankman-Fried is worth now, but it's likely not close to $11 billion.