The former CEO of the now-defunct cryptocurrency exchange FTX, Sam Bankman-Fried's successor John Ray has made a striking statement regarding Bankman-Fried's claims of innocence. Bankman-Fried stands convicted of embezzling $8 billion from FTX customers, a charge he vehemently denies.
As reported by Reuters, addressing the issue in a victim impact statement submitted to the Manhattan federal court, Ray expressed scepticism over Bankman-Fried's assertions, stating, "Mr. Bankman-Fried continues to live a life of delusion." Ray emphasised that any potential recovery of funds by FTX customers is attributed to the bankruptcy estate's endeavours, not an indication of Bankman-Fried's innocence. "There should be no delusion that because assets have increased in value...that there was no need for the Chapter 11 cases," Ray added.
The sentencing hearing for Bankman-Fried is slated for March 28, with prosecutors pushing for a 40- to 50-year prison term, citing his alleged misappropriation of customer funds. However, defence attorneys argue for a reduced sentence, highlighting Bankman-Fried's efforts post-collapse to mitigate losses and recover assets for FTX customers.
Bankman-Fried Denies Intent To Steal From Customers
Bankman-Fried, aged 32, has maintained his innocence, pledging to appeal his conviction on seven fraud and conspiracy charges. While admitting to managerial errors during his tenure at FTX, he denies any intent to steal funds from customers.
Marc Mukasey, Bankman-Fried's defence attorney, rebuked prosecutors' sentencing proposal, accusing them of distorting facts to fit a predetermined narrative. "The memorandum distorts reality... and casts Sam as a depraved super-villain," Mukasey remarked.
The issue of restitution for FTX customers remains contentious, with some expressing dissatisfaction with the proposed reimbursement based on cryptocurrency values at the time of the exchange's collapse. Mukasey argued that any delays in compensating customers should be attributed to bankruptcy proceedings rather than Bankman-Fried's alleged crimes.
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Ray, drawing on his experience in managing the aftermath of Enron's bankruptcy, warned that Bankman-Fried's actions had left many accounts with fewer assets than initially believed. Additionally, he expressed doubt regarding the prospects of significant recovery for FTX equity investors, also victims of Bankman-Fried's conspiracy to defraud.
As the legal battle continues, the fate of FTX customers' restitution hangs in the balance, with the March 28 sentencing hearing expected to provide further clarity on the matter.