(Bloomberg) -- The judge presiding over Sam Bankman-Fried’s sentencing Thursday will have to decide whether the fallen crypto mogul is a run-of-the-mill financial fraudster or a villain eclipsed only by Ponzi scheme mastermind Bernie Madoff.

Whichever view carries the day will determine whether the 32-year-old Bankman-Fried spends most of his remaining years behind bars or emerges from prison while still in middle age.

Prosecutors are seeking a sentence of 40 to 50 years for what they have called “likely the largest fraud of the last decade” involving more than 1 million victims and losses of more than $10 billion. Bankman-Fried will learn his fate from US District Judge Lewis Kaplan, who jailed the former FTX CEO for violating bail conditions and observed his unsuccessful, often evasive efforts to clear himself on the witness stand.

Bankman-Fried’s legal team is seeking a sentence of no more than 6 1/2 years, citing his philanthropy and claiming prosecutors distorted the truth by painting him as a “depraved super-villain” who should be locked up until he is an old man.

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Michael Weinstein, a former federal prosecutor, expects Bankman-Fried could get 25 to 32 years. “He’s the millennials’ Madoff,” said Weinstein. “He may get out just in time to apply for Social Security.”

In a court filing, prosecutors argued that Bankman-Fried deserved a sentence of as much as 50 years because the $10 billion in losses he caused were “right below Madoff,” whose crimes were estimated to have cost his victims $13 billion. The brief mentioned Madoff 25 times.

Madoff, who received a sentence of 150 years, died in 2021 after a dozen years in prison.

Bankman-Fried, in his filing, insisted his actions didn’t harm customers or lenders. That was because crypto exchange FTX was solvent when it filed for bankruptcy and that it had the money all the time, he said.

But as the hearing started Thursday, Judge Kaplan rejected the idea that FTX customers had suffered no losses because of the recent rise in the value of cryptocurrencies.

“A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence by using his Las Vegas winnings to pay back all or part of which he stole when he finally gets caught,” Kaplan said.

A victim of the FTX collapse addressed the court Thursday. Sunil Kavuri, who had previously submitted a victim letter, said he flew to New York from London to tell his story.

“I lived the FTX nightmare every day for two years,” Kavuri said. “I have spoken to tens of thousands of victims just like myself who have had their dreams destroyed as a result of this FTX fraud.” 

In determining Bankman-Fried’s sentence, the judge will be consulting guidelines first adopted in 1987 in an effort to reduce disparities across the federal criminal justice system. The guidelines take into account the seriousness of a crime and the individual’s criminal history.

The US Supreme Court ruled in 2005 that the mandatory guidelines were unconstitutional. Instead, the court said, judges must consider the guidelines but aren’t required to follow them.

Commentators and judges have criticized the guidelines for recommending unduly harsh prison terms for some financial frauds. As a result, judges frequently sentence at the bottom of the guidelines or even below them. Bankman-Fried’s guideline sentence is 110 years, which even prosecutors think is too high.

A jury in Manhattan convicted Bankman-Fried in November of seven charges, including wire fraud and conspiracy. Prosecutors said that as the head of FTX he directed the transfer of customer money into Alameda Research, an affiliated hedge fund, for risky investments, political donations and expensive real estate before both companies collapsed into bankruptcy in 2022.

A potential bright spot for Bankman-Fried is that FTX customers and lenders are expected to get much of their money back through the company’s bankruptcy.

It’s a development Bankman-Fried should emphasize when he appears in court during the hearing Thursday if he hopes to nudge the judge toward a shorter sentence, said Douglas Berman, who teaches at The Ohio State University’s Moritz College of Law and runs the influential Sentencing Law and Policy blog.

Bankman-Fried should “take joy in what I think is the single best fact for him, which is nobody losing a lot of money, even though this could have been incredibly ugly,” he said.

Changing crypto market conditions have played a crucial role throughout the FTX saga. A few months before the company’s downfall, a series of crypto scandals, including the collapse of the TerraUSD currency and the implosion of hedge fund Three Arrows Capital, sent digital asset prices plummeting.

In the weeks prior to his arrest, Bankman-Fried conducted media interviews in which he denied that he had knowingly done anything wrong. Instead, he blamed the exchange’s implosion on the swift downturn in crypto prices and his inability to anticipate the impact on his company’s business.

Prosecutors have argued that the former CEO did consider the potential consequences from a steep decline in prices and decided to misuse customer funds to cover what amounted to billions of dollars of losses.

In the year following Bankman-Fried’s arrest, the crypto market has sharply rebounded, with Bitcoin reaching an all-time high of almost $74,000 earlier this month. The approval of Bitcoin exchange-traded funds by the US Securities and Exchange Commission in January, new crypto venture funding deals and recent legal victories for the industry have all fueled the renewed optimism around digital currencies.

The crypto renaissance has even bolstered FTX’s own holdings. Solana, a crypto token once endorsed by Bankman-Fried that is one of the FTX estate’s major holdings, has soared in value. The company has also benefited from the artificial intelligence boom, with the estate planning to sell two-thirds of its stake in AI startup Anthropic for $884 million.

But FTX’s good fortune probably won’t spare Bankman-Fried from a long sentence.

“Just because you get lucky and the fraud works out, that doesn’t make it not a fraud,” said Timothy Howard, a former federal prosecutor in New York.

Howard said he guesses Bankman-Fried will get 20 years, but he won’t be shocked by any sentence of between 15 and 30 years.

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