According to former federal prosecutor Mitchell Epner, the asset forfeiture order is intended to ensure that if Sam Bankman-Fried makes any money, it will not belong to him but to the state and the victims of the fraud. “He will lose the ability to accumulate wealth for the rest of his life,” Epner said.
Sam Bankman-Fried leaves court in New York City last July. Photo: Reuters
The court ordered Bankman-Fried to repay $11 billion, which it said was money he earned during the course of his crimes. Of that, $8 billion was money he earned from “wire fraud and wire fraud conspiracy against FTX customers, as well as assets related to the conspiracy to launder the proceeds.”
In addition, another $1.72 billion is the amount FTX raised from investors under false pretenses; $1.3 billion is the amount FTX owes to lenders. The total amount of the forfeiture is expected to go to the US Treasury rather than directly to individual victims.
Judge Lewis Kaplan of the Southern District of New York explained that direct restitution is “impractical” given the complexity of the case and the number of victims involved. However, the government could use seized assets to compensate victims of the FTX collapse. Securing restitution to victims could take years.
It’s unclear how much Bankman-Fried is worth now, but it’s unlikely to be anywhere near $11 billion. As Bankman-Fried prepares to serve his 25-year prison sentence, his assets will be turned over to the government. Once he’s released, he’ll have to work to pay off the rest of his debts.
When Bankman-Fried is released from prison, the government could theoretically take a portion of his earnings. But former Justice Department fraud attorney Peter Katz said the money might not be worth the wait.
“If he had a job where he was making millions of dollars, or if he had financial luck, the government would be after him,” said former attorney Katz. “If he went and got a job at 7-Eleven and made $20 an hour, he would be able to survive.”
The significance of the seizure order meant that Bankman-Fried would never be able to become too financially comfortable, as the government could pursue him for a long time for his large debts.
Ngoc Anh (according to CNN)
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