.svg)
The former head of FTX seeks leniency based on his “good deeds” and “charitable works”, two Binance executives are detained in Nigeria, and the European Central Bank claims Bitcoin is ready to crash.
Attorneys representing convicted fraudster Sam Bankman-Fried have asked the courts for a light sentence due to their client’s “charitable works”, among other mitigating factors.
On Tuesday (February 27), Bankman-Fried’s lawyers submitted a 98-page sentencing memorandum to the District Court of the Southern District of New York (SDNY).
The memorandum was filed in response to a pre-sentence report (PSR) penned by SDNY probation officers, who recommended a sentence of 100 years’ imprisonment.
Bankman-Fried’s lawyers called the recommendation “grotesque” and pushed for a more lenient sentence of between five and seven years instead.
PSR recommendation “unsupported” by facts
The counsel argued that the PSR’s recommendation is based on a misunderstanding of the financial losses incurred due to Bankman-Fried’s crimes.
While the courts have accepted that FTX customers “lost” approximately $10bn, Bankman-Fried’s counsel said this figure is misleading.
In reality, the counsel said that although there was an $8bn shortfall in liquid assets in the run-up to bankruptcy in November 2021, this does not mean these assets have been lost forever.
On the contrary, FTX customers are “poised to recover a hundred on the dollar” once disbursements begin at the end of bankruptcy proceedings, they said.
As evidence, Bankman-Fried’s counsel pointed to presentations made by FTX’s new management to the Creditors Committee, showing that as of January 2024, FTX.com had more than $10bn in assets.
Bankman-Fried’s character and charitable works
The second part of the memorandum deals with Bankman-Fried’s “good deeds” and “charitable works”.
“Sam is not the ‘evil genius’ depicted in the media or the greedy villain described at trial,” the counsel wrote.
“He is a 31-year-old son, brother, friend, humanitarian and philanthropist. He is a brilliant, complex and humane person."
Among those who knew him, the “real Sam Bankman-Fried” is described as someone who “cares deeply about other people” and whose “heart is in the right place”.
The memorandum notes that the crypto tycoon is “full of regret” and is “devastated” that many of the causes he donated to have been harmed reputationally and have returned the money to FTX.
These causes — which include animal welfare, poverty reduction and pandemic prevention — are mentioned frequently in the 29 character references that were submitted alongside the memorandum.
A wide range of individuals wrote references in support of Bankman-Fried, including family members, former colleagues, university professors, a psychiatrist, a “philanthropy expert”, a prominent animal rights lawyer and the CEO of a green energy company.
According to the referees, Bankman-Fried is a selfless and altruistic person with “a genuine concern for those less fortunate around the world.”
While working on Wall Street prior to FTX, Bankman-Fried is said to have given the majority of his personal earnings to charity — a trend that continued and expanded under FTX.
The filing goes on to state that Bankman-Fried suffers from anhedonia and severe insomnia, and is autistic.
While in college Bankman-Fried was diagnosed with anhedonic depression — an inability to experience joy or pleasure — and has been on antidepressant medication since.
Further, due to being neurodivergent, Bankman-Fried is said to be “uniquely vulnerable” in prison, and would be at greater risk of physical harm and extortion than other inmates.
With sentencing scheduled for March 28, Bankman-Fried’s counsel has asked the court to reject the “barbaric” proposal of the PSR.
Two Binance execs detained in Nigeria
Local media in Nigeria has reported that two Binance executives have been detained following an investigation into currency manipulation and movement of illicit funds.
Premium Times, a Nigerian business news site, reported on Wednesday (February 28) that the two executives are an American and a British-Pakistani.
Sources familiar with the matter said the pair were detained a day after they flew into Nigeria to try and persuade the authorities to unblock the Binance exchange.
These efforts have so far been unsuccessful, with the authorities demanding that Binance hand over seven years of transaction records showing how the naira is used on the Binance exchange.
Last week, Nigeria took down Binance, Coinbase, Kraken and numerous other crypto platforms following a directive from the Nigerian Communications Commission (NCC).
The ongoing crypto crackdown is said to have been triggered by a collapse in the value of the naira.
Since the end of January, the naira has lost almost 50 percent of its value against the US dollar due to capital flight and speculation, both of which are enabled by crypto.
Source: TradingView
“Bitcoin has failed”, says ECB
Finally, a new report by the European Central Bank (ECB) has warned that Bitcoin is ready to collapse, following a sudden price rally fuelled by a key regulatory approval in the US.
In January, the US Securities and Exchange Commission (SEC) approved 11 applications to launch spot Bitcoin exchange-traded funds (ETFs), allowing institutional investors to gain easier exposure to the asset.
Since then, Bitcoin’s price has rallied over 30 percent, but two key officials at the ECB say the rally is another “house of cards” that will soon collapse.
“For disciples, the formal approval confirms that Bitcoin investments are safe and the preceding rally is proof of an unstoppable triumph,” wrote Ulrich Bindseil and Jürgen Schaaf.
“We disagree with both claims and reiterate that the fair value of Bitcoin is still zero.”
Bindseil and Schaaf said a renewed boom-bust cycle in Bitcoin is a “dire” prospect, where the end-result will be collateral damage and the upward transfer of wealth to more sophisticated investors.
“Bitcoin’s price level is not an indicator of its sustainability,” they said. “Instead, a reflation of the speculative bubble shows the effectiveness of the Bitcoin lobby.”
