Everything SBF is doing is in singular pursuit of not going to jail

https://newsletter.mollywhite.net/p/everything-sam-bankman-fried-is-doing

by mfbx9da4 • 4 years ago

412 487 4 years ago

newsletter.mollywhite.net

elzbardico• 4 years ago

He won't go to jail. He is a member of the upper crust of our aristocracy, and we live under some kind of feudal/monarchic system nowadays.

gkoberger• 4 years ago

I'm normally with you on the whole "rich people don't go to jail" thing, but I think this is a misread of this situation. He's in no way a member of the upper crust of our aristocracy – he had money, but he hadn't yet traded some of that money for power.

He currently has no money, and he ripped off a lot of people with money. He'll go to jail.

AbrahamParangi4• 4 years ago

It is very unclear how much money he has under his control.

mrguyorama• 4 years ago

He was new rich and old rich will never skip a chance to slap down the new rich to keep them in their place.

boringg7• 4 years ago

He is not a member of the upper crust - he was trying to muscle his way in but he went down in flames. I swear there are a lot of bot like comments that come through here without thinking.

If they can prove it was fraud he'll be going to jail. Depends how smart they were and how well they covered their tracks.

misiti37803• 4 years ago

Given that Caroline Ellison supposedly told the whole hedge fund she and 3 other people knew about the FTX customer funds being transferred, I dont think they did a decent job, that is a lot of potential witnesses.

misiti37803• 4 years ago

He is 100% going to jail.

maxbond2• 4 years ago

Let's say that he does go to jail, but it takes 5 years. What would you conclusion be at that time?

paulsutter• 4 years ago

Bernie Madoff was arrested so quickly because he confessed directly to FBI agents, after confessing to his sons who contacted the FBI:

https://www.marketwatch.com/story/there-is-no-innocent-expla...

runevault• 4 years ago

People with money don't go to jail so long as they one of a few things are true

1) They still have money (he doesn't seem to have so much anymore)

2) They already traded money for power so people feel they owe him favors (no indication of this)

3) He didn't screw over other rich people (seems he did screw over other rich people)

The third one in particular is important. Messing with other rich people's money is far and away the easiest way to get yourself thrown in jail despite any wealth you might have.

runesofdoom• 4 years ago

Yep. "Don't screw over important investors" seems to be the key rule that Madoff, Holmes and now SBF have broken.

outside1234• 4 years ago

The worst part is you just know this guy has 100x what any of us have hidden away in defrauded gold bars or whatever and that he will face no consequences for it while a poor person who steals a pack of gum will go to prison for years.

pdabbadabba3• 4 years ago

For everyone on this thread making broad proclamations about how SBF won't go to jail because of American corruption--I'll see you back here in a year or two. Then we can have that conversation.

In the meantime, I suggest that you consider whether you would reevaluate your priors in any meaningful way if, as I expect, SBF is ultimately prosecuted.

infiniteh00p• 4 years ago

For everyone on this thread making broad proclamations about how SBF will go to jail because of American justice--I'll see you back here in a year or two. Then we can have that conversation.

In the meantime, I suggest that you consider whether you would reevaluate your priors in any meaningful way if, as I expect, SBF is ultimately not prosecuted.

pdabbadabba3• 4 years ago

Deal!

warinukraine• 4 years ago

Not the person you're responding to, but I would encourage you to read on the history of _fraud_ in the USA and how that usually turns out.

bhouston2• 4 years ago

My bet is that he tries his hardest to never set foot on US soil again. He flees the Bahamas to a country without an extradition treaty and who also doesn't want to prosecute him -- the Bahamas likely does. So in a way, I think he may avoid prosecution, but not because of US corruption, but because he flees.

This is also why SBF can not testify to congress in person as he will likely be arrested once on US soil as a flight risk. Also why he didn't attend the recent NYTimes event in person -- again he can not step foot on US soil right now or probably ever again.

hn_throwaway_995• 4 years ago

Though cute, this is a vacuous reply. The fact is, the US justice system is quite good at prosecuting white collar crimes where:

1. A lot of money was lost, especially rich people's money.

2. The fraud is particularly egregious, that is where it wasn't just a one time thing, but where the whole enterprise was a house of cards.

3. Where there is a clear smoking gun.

1 and 2 are obviously true in the FTX case, and I think given what has been reported so far that #3 will also be fairly apparent (e.g. there are tweets SBF made at the end of September that were lies that deliberately tried to hide the token movement between Alameda and FTX).

I'd easily bet that SBF will, when all is said and done, spend at least a decade in jail.

europeanguy• 4 years ago

Don't you feel like a moron now?

ransom15384• 4 years ago

Let's not forget extradition is in Bahamian jurisdiction. The Bahamian politicians will most likely want their cut and stall extradition, and to do that they can either 1) shake down FTX leaders or 2) cut a deal with US extradition courts for cash. I don't see 2) working out since the case is so public. There wont be a snatch and grab either. I don't see a extradition until all the local cash is gone from FTX leaders and the Bahamians lose interest which could be years if not a decade. I bet the Bahamians already took FTX leaders passports and are seizing properties.

user_named• 4 years ago

You mean FTX, not SBF.

Scoundreller3• 4 years ago

Yeah, Bahamas would definitely bend over backwards for the US.

US blacklisting Bahamas with the various tools at its disposal isn’t worth it for Bahamas.

(Cutting off preclearance, cutting off from US financial system, increasing visa/travel barriers for Bahamians)

throwaway17773• 4 years ago

Not entirely, since some of the entities were based in the US. But this is likely one thing the prosecution has to untangle before filing charges.

fnands• 4 years ago

If Elizabeth Holmes is going to jail then SBF probably is too.

gerad• 4 years ago

Bernie Madoff got sentenced to >100 years. That feels like a pretty close comp to me.

https://en.wikipedia.org/wiki/Bernie_Madoff

brookst4• 4 years ago

Yes. What the performatively cynical crowd is missing is that SBF, like Elizabeth Holmes, stole from the rich.

Even for people who believe that everything is 100% corrupt 100% of the time in the American justice system, SBF going to jail should be seen as confirmation of that bias.

ehhthing• 4 years ago

While FTX US did operate in the US, its finances were never nearly as fucked up as FTX (The Behamas company) was, especially with its relationship with Alameda.

halpmeh• 4 years ago

Technically, updating priors wouldn't necessarily be warranted. Consider a statement X implies Y, e.g. The government is corrupt, which implies SBF won't go to jail. Just because X implies Y does not mean ~Y implies ~X. E.g. SBF going to jail does not imply the government is not corrupt.

zopa• 4 years ago

https://en.m.wikipedia.org/wiki/Contraposition

I imagine you’re remembering that P -> Q does not mean ~ P -> ~Q. That’s right, but you can absolutely get to ~Q -> ~P.

sebzim4500• 4 years ago

Sure but it is a simple result in Bayesian statistics that if event X increases your confidence in fact Y then ~X should decrease your confidence in Y.

For example, if SBF evading jail would increase your confidence in the statement "The US justice system is wholly corrupt" then SBF being sentenced should decrease your confidence in it.

AkshatM• 4 years ago

I get what you mean, but I think you've formulated this incorrectly. Let P(Y) be your prior about government corruption. Let X be the event that SBF is arrested. You want to compute P(Y|X) using the Bayesian update formula and then set P(Y) = P(Y|X). That is what is meant by re-evaluating your priors.

You're modelling X and Y as propositions and you're correct about the inference of ~X and ~Y, but Bayesian updating is about degree of belief in those propositions, which your inference is not a claim about.

davidktr2• 4 years ago

X -> Y litteraly means ¬Y -> ¬X because of (¬X ∨ Y) = (Y ∨ ¬X).

panda-giddiness4• 4 years ago

Just because X implies Y does not mean ~Y implies ~X.

As others have mentioned, X implies Y does in fact require ~Y implies ~X. I think your example is confusing because "the government is corrupt" means many different things, but you're using it in a rather specific way ("the government is protecting SBF"). The equivalence of `X implies Y` and `~Y implies ~X` is more manifest through the following example

   "The government is protecting SBF, so SBF won't go to jail"

and

   "SBF went to jail, so the government wasn't protecting him."

electrondood• 4 years ago

You're conflating real life with logic.

In your example, according to logic, if X implies Y, then if you don't have Y, you necessarily don't have X. If this were a logic exercise, then not "SBF goes to jail" necessarily implies not "the government is not corrupt."

However, in real life there's no connection between the two.

dotnet004• 4 years ago

There are two main stages to get through, for him to go to jail and then for him to stay in jail long enough for it to not seem like a total farce. At this point, maybe the former will still happen considering that it's been a month and no one's forgotten about him yet, but the latter is still pretty questionable.

Plus, if you were to ask me, I don't really have a specific sentence duration in mind which I would consider to be sufficiently long, so it would entirely come down to my takeaway from whatever the judge says.

Eg if the judge gives him ~10 years stating that he did indeed intentionally fraud people out of $8B, it'd be okay. But on the other hand, if it seems like they're intentionally avoiding the obvious fraud to make his charges weaker, it obviously won't be satisfying.

billjings• 4 years ago

Bernie Madoff was sentenced to 150 years in prison. He died there, having served 11 years of his sentence.

panda-giddiness4• 4 years ago

Not a lawyer, but I'll piggyback to say that the inevitable indictment will likely require proving criminal intent, specifically that SBF knowingly and willingly engaged in fraud. The Justice Department won't indict SFB until they have ironclad evidence demonstrating as much.

Consider a rushed indictment: SBF can always invoke his right for a speedy trial (i.e., the prosecutors must be ready for trial within 6 months of indictment). The prosecution would thus be in the ineviable position of simultaneously gathering evidence and building the case. Alternatively, they could wait to indict until after they've gathered evidence, which will give them ample time to meticulously build a case against him.

Since the harm of losing the case is greater than the harm of letting him roam free for a couple years, a delayed indictment seems like the clearly better option.

gizmo• 4 years ago

Also, there is considerable career risk involved for the prosecutor. This is a high-profile case and the prosecutors can say goodbye to whatever ambitions they have if they botch this.

cryptonector5• 4 years ago

a speedy trial (i.e., the prosecutors must be ready for trial within 6 months of indictment).

It's 71 days for federal trials, not six months. I know, it's a nit.

xmodem• 4 years ago

What would you say is different about this case, or what about the environment has changed, as compared to Madoff in 2008?

SkyMarshal• 4 years ago

the inevitable indictment will likely require proving criminal intent, specifically that SBF knowingly and willingly engaged in fraud. The Justice Department won't indict SFB until they have ironclad evidence demonstrating as much.

IANAL but I'm not sure that's true. I believe they can charge him with fraud or negligence. The latter carries lesser penalties, and everything SBF is doing now is trying to steer the inevitable indictment in that direction.

_n_b_2• 4 years ago

Yes, and as former federal prosecutor and current white-collar defense attorney Ken White explains on Twitter, moving too fast also prevents them from using their best tools: flipping witnesses for lying and the Grand Jury.

His really good thread starts here: https://twitter.com/Popehat/status/1600877380683280384

bin_bash• 4 years ago

specifically that SBF knowingly and willingly engaged in fraud

He very well may go to prison for something other than defrauding FTX customers. See Al Capone for tax evasion and Elizabeth Holmes for defrauding investors (not patients).

swyx• 4 years ago

does lack of intent waive responsibility for criminal negligence?

danenania• 4 years ago

Is there anything to prevent him from moving to a country without a US extradition treaty in the meantime? That seems like a pretty big risk of waiting too long.

danielfoster• 4 years ago

He just has to skip up and lie to the feds once. Then he can and will be prosecuted for lying to federal agents.

ianhawes• 4 years ago

I agree with you, HOWEVER, we have yet to see or hear rumors of any type of search warrant(s) being executed in the Bahamas or the US.

As we saw with the Fyre Festival guy and other similar fraud cases, the government wants to move quickly to secure physical hard drives. In the case of that dude, Fyre happened on Thursday and they executed a search warrant at his apartment on Monday morning.

It’s possible that grand jury subpoenas have already been issued and served, but that doesn’t typically generate the criminal intent evidence they will need for this case.

We also know from former employees that routine business was typically discussed on Signal. That’s probably not a great sign for the government as they will need physical access to the devices used OR they will need to snag an iCloud (or other) device backup and grab the contents from there.

Your points about a speedy trial and losing a case are generally valid BUT the DOJ can always opt to file a superseding indictment once he is in custody. I don’t know the full deal with Extradition from the Bahamas but it’s likely it will take some time (several months). Despite this being a white collar case the government will absolutely seek to keep him incarcerated given his flight risk and resources unaccounted for. Anything he’s embezzled from FTX in the span shortly before bankruptcy will be used by the DOJ as proof he has hidden resources.

Remember, in pretrial arguments, they can come up with pretty far fetched or ridiculous arguments that have no merit or bearing later on. For example, in the case of Marcus Hutchins (the WannaCry kid), prosecutors argued he was potentially violent because he visited a shooting range several days prior. He was, in fact, in Las Vegas for DEFCON and went to one of many shooting ranges advertised on the Strip.

dayvid• 4 years ago

For Elizabeth Holmes, the original articles which brought her down came out in 2015. She was indicted 2018. She was sentenced 2022. These things take time and the Fed is very thorough. I'm fairly confident SBF is going to get jail time. How much, IDK. It is fascinating to see someone craft their lying in real-time, though.

moralestapia• 4 years ago

likely require proving criminal intent

Yes, and there's plenty of that, have you read his Twitter timeline? Have you seen his interviews, etc? The guy's indicting himself, lol.

bradgessler• 4 years ago

For the sake of conversation; what happens if it can’t be proven that SBF engaged in fraud? Can criminal charges for negligence be brought forth? I’d imagine there’s a ton of civili liability in this whole mess.

bdangubic• 4 years ago

-This did not age well :)

dsfyu404ed3• 4 years ago

My cynical take is that the fact that the well to do are screeching about how he won't go to jail all but ensures he will. The system always saves face.

The ruling class needs the PMC to see the system as legitimate and they'll happily throw one of their own in jail to do it.

nowherebeen4• 4 years ago

It took 7 years, from 2015 to 2022, to convict the Therano founders. What makes you think it will be concluded in 1-2 years?

Update: Fixed the year (15 instead of 14)

hn_throwaway_995• 4 years ago

That's an apples to oranges comparison. First, the WSJ article came out in 2015, and things didn't really start clamping down until 2016. In 2018 they were charged by the SEC.

Nobody is saying the FTX saga will be concluded in 1-2 years, but it's quite reasonable to think the principals will have been indicted by then with legal proceedings underway.

leeches• 4 years ago

I wonder how having evidence of fraudulent transactions publicly accessible on the blockchain will affect the investigation time. It seems like once they figure out exactly which addresses to look for, they'll have timestamped fingerprints that trace back to all sorts of irrefutable evidence.

EamonnMR• 4 years ago

Seeing SBF and saying 'look how corrupt America/NYT is' feels like deflection from the more obvious 'look how corrupt Crypto is.'

throwaway17773• 4 years ago

Don’t know why this is downvoted, it could be true.

siftrics15• 4 years ago

If FTX was on chain, SBF could not have absconded with users' deposits.

Crypto mathematically prevents fraud. The problem here is that business was conducted in the fiat world and on a "trust me" basis.

photochemsyn• 4 years ago

Crypto exchanges certainly seem to be geared towards fraudulent activities, and they've lured investors in with promises of high returns. The whole so-called 'decentralized finance' world (DeFi) seems to be full of shady actors and money-launderers, but cryptocurrencies themselves - when no used in the way, say, that subprime mortgages were - as vehicles for gambling - don't seem to be inherently corrupt.

FTX/Alameda is now the poster child for Defi, isn't it? Good overview here:

https://blockcast.cc/news/revealing-the-new-defi-gang-ftx-an...

olalonde2• 4 years ago

Who is Crypto and how are they supposed to put SBF behind bars?

ralston3• 4 years ago

What does this have at all to do with crypto as a whole? SBF is a single individual. This was a centralized exchange. I'd say CeFI is not really crypto at all. After 2008 was every single U.S. bank corrupt? Downvote.

RestlessMind• 4 years ago

Judging the entire Crypto based on SBF / Luna is like judging the entire Silicon Valley based on a handful of big-name adtech scums. Sure, they dominate the zeitgeist but there is a lot more to those ecosystems.

eric_cc5• 4 years ago

What is corrupt about bitcoin, exactly?

cm2187• 4 years ago

The problem isn't whether he will be prosecuted, but for what. His play right now seems to be playing dumb. I don't know if it can work, but he still needs to build a credible alternative story to the criminal behaviour that many here seem to suspect, for the different parties who seem to be happy to keep supporting him.

dougSF70• 4 years ago

They will probably start lower down the organization, getting evidence that wrongful behavior was sanctioned by management. Ignorance of the law is not a defence. He will go to jail.

kosievdmerwe• 4 years ago

Probably not that easy to play dumb if you set up a corporate structure involving a hundred different companies.

I don't imagine a jury would see that level of unfathomable complexity and think "clearly a guy in over his head".

politician2• 4 years ago

It was BAU to process all withdrawals from a single source of funds!

FTX had risk officers, they had a legal team. Whoever signed off on this, including SBF, needs to be prosecuted.

paulusthe3• 4 years ago

It can't work; there are documents. This stuff is always found in documents. In Madoff's case, aside his confession, they had the original financial documents and the ones manually edited by Madoff which were given to investors. That was sufficient to prove that he knew the truth and was defrauding his investors.

Somewhere in the terabytes of internal emails, screenshots, and discord logs there will be something showing that SBF knew what he was doing, even if it shows up in a completely unforeseen way.

scottLobster2• 4 years ago

I think part of it is people not following his latest interviews. I was one of those thinking he wouldn't spend a day in jail, however he then proceeded to open his mouth and, in public interviews (Twitter spaces in particular) on the record admitted to a whole host of crimes. Coffeezilla in particular has done excellent work (NYTimes, WaPo, a youtuber with no budget is doing better investigative journalism than you): https://www.youtube.com/watch?v=4o_jPzBZSIo

It would be like if Epstein just came out on a public interview and said "yeah I hosted a pedophile ring for global elites as part of a CIA operation to get dirt on foreign nationals, in particular these ones: <insert list of names> but I didn't know what I was doing!"

I don't see how SBF can walk back all of his very public admissions to date. "Oh I was lying in all of those just to troll the internet", but then he can't make any statement in his own defense. He must really be one of those liars who believes his own bullshit, that's the only explanation for his behavior. He's totally going to jail at this point

paulusthe3• 4 years ago

SBF is incredibly, blindingly, arrogant. He thinks he can secure his freedom by proclaiming incompetence to anyone who will listen, but along the way happens to occasionally admit doing some very illegal things.

jklein113• 4 years ago

While I do think that what Coffeezilla did was a terrific piece of journalism I still don't think that what SBF has fessed up to alone can be evidence of fraud. He has admitted to breaking the terms of services with his users but I didn't hear an admission of intent. He can still plead negligence in this case.

Don't get me wrong, I think that doing all of these interviews is really the nail in his coffin. I don't see how anyone can watch these interviews and not think that what this guy did was criminal. I could imagine in an alternate universe, where he just kept his mouth shut, SBF could get some kind of deal if he helps the bankruptcy courts claw back some of the assets improperly paid.

This guy is clearly a narcist who thinks that he will be able to win this in the court of public opinion by smiling at the camera and paying lip service.

tibbydudeza• 4 years ago

Coffeezilla is awesome to sniff out the BS.

bgitarts• 4 years ago

How would you evaluate your priors if he is prosecuted, convicted and then given a presidential pardon?

macintux• 4 years ago

...then given a presidential pardon?

I'd go online to see if I could find someone to take a wager on that, but that's such easy money I doubt I'd get odds worth it.

I'd lay $1000 against that happening, and I don't have $1000 to spend lightly.

pdabbadabba3• 4 years ago

Dramatically.

Cipater• 4 years ago

I'd set my priors on fire and throw them in the trash.

anon7725• 4 years ago

His parents are both big shot lawyers who were fairly involved in the whole thing, right? I would be seriously and pleasantly surprised if dude does a day behind bars.

peanuty1• 4 years ago

Yes, they're both Stanford law professors and compliance lawyers. In fact, he was born at Stanford.

throwaway17773• 4 years ago

Elizabeth Holmes got 11 years. There’s hope.

rootusrootus6• 4 years ago

I would still like to know how that all played out. There were credible predictions that the federal sentencing formulas would put her away for life. For next time, I'd be interested in knowing why those predictions were wrong.

coldtea4• 4 years ago

Black guys have gotten more for stealing a pizza or something...

somrand02• 4 years ago

this is reminiscent of that time I heard that South Korea had prosecuted and found an ex-president[1] guilty of crimes!

There was a Samsung VIP involved too. [2,3]

I was quite impressed because putting ex-presidents on trial is (was?) illegal in my own country! (there was a referendum recently, but I'd need to look up the outcome of that, no ex-presidents are on trial as far as I know)

I'm telling this because 'recently', they overturned that ruling.

so even if he goes to jail, let's wait 3 or 4 more years after any public rulings to check if he's been pardoned.

There was a Samsung VIP involved too. [2,3]

[1] https://en.wikipedia.org/wiki/Park_Geun-hye#Pardon_and_relea...

[2] https://www.bbc.com/news/business-55674712

[3] https://www.msn.com/en-us/news/world/samsung-heir-lands-pres...

jrochkind12• 4 years ago

To be fair, when you learn that South Korea has prosecuted and convicted most of it's ex-presidents (also one assassination and one suicide)... I'm not sure it makes South Korea look uncorrupt. It makes me figure some combination of routine corruption in the presidency and corrupt political retribution by successors.

https://apnews.com/article/f4de2c758f70450583bdf1539e3fa3bd

soheil• 4 years ago

I don't think anyone can make any proclamation as what will happen without the evidence, which neither you or anyone else other than investigators will have access to. On top of that a jury has to find him guilty again not you or almost certainly anyone else here. If you're making a statement about the American judicial system as a whole (pro or con) you're very much generalizing based on the outcome of one case.

Elizabeth Holmes was sentenced to jail. Adam Neumann was not.

Without the evidence we're just hypothesizing, as far as I'm concerned justice could have been served in both cases, I simply don't know and I doubt most people who are so eager to take one side or another truly care deeply enough to actually go through the entirety of those two past cases and look at all the legal arguments and details of the case (which is all public) before reaching a conclusion.

ghaff2• 4 years ago

My gut feel says to not believe his dumb kid act. But it's up to federal prosecutors to actually prove to a jury that he knowingly committed fraud or whatever charges they ultimately decide to bring.

RC_ITR7• 4 years ago

It seems like everyone just ignores their ability to use the Internet in cases like this.

Enron (a pretty good analogue since the same CEO is liquidation FTX) went under in 2001 and Ken Lay was indicted in 2004.

Madoff only went to jail right away because he cooperated

stingrae• 4 years ago

This is exactly what I was going to point out. People seem to forget that these kinds of cases take a lot of time to build.

somenameforme4• 4 years ago

The problem I have in this case is that many things are being reported which would be immediately indictable. Billions of dollars was misappropriated, which is a felony that could easily result in decades in prison. Billions more simple disappeared, and there was even a 'back door' in their software enabling unaccountable access of funds. And this all about the time that SBF was splashing around billions of dollars like beads at Mardi Gras - living extremely lavishly, and even trying to get in on Twitter for $3 billion.

Bringing immediate charges against him on the low hanging fruit does not preclude later charging him with anything that may require further work. And it also helps snag him before he decides his little 'blame everybody else and get the corporate media (which I also "donated" to) to back me up' isn't working out and plays a disappearing act. He's a billionaire already living in the Bahamas who could easily spend the rest of his life behind bars. He is an extreme flight risk, yet the DoJ continues to hem and haw.

newsclues• 4 years ago

I think he will eventually be appointed to the of the board for the Federal Reserve. Maybe even chairman!

roland35• 4 years ago

It hasn't even been a month since FTX collapsed. That's like milliseconds in legal time!

eastbound2• 4 years ago

In France there is preventive prison - When the guy obviously did something and it will be offset on the final prison time.

Is there anything similar in USA? Only for violent crime maybe?

HWR_14• 4 years ago

There's also the very real question of if the Bahamas want to lock him up first. Since they've been trying to promote themselves as the place to base a crypto business, it makes good marketing sense for them to punish him severely. If they do, the next wave of crypto banks being "based in the Bahamas" could be a sign of legal safety.

paulusthe3• 4 years ago

He's definitely getting prosecuted. It just takes DoJ a long time to build cases, especially financial cases, because the burden of being able to convince a jury that something intentionally malevolent happened as opposed to simply incompetent.

To Molly White's point, SBF is essentially walking around shouting "I was incompetent! Very very incompetent!" In an attempt to make that, as opposed to his clear fraud, the narrative.

wnevets• 4 years ago

For everyone on this thread making broad proclamations about how SBF won't go to jail because of American corruption

People are forgetting he stole money from rich people, the worst crime imaginable in America. If instead he made billions killing poor people either by selling them highly addictive drugs or by poisoning their drinking supply his company would be hit with a fine.

themitigating• 4 years ago

Can you provide an example in which a crime was committed by selling addictive drugs or poisoning water supplies?

If you are alluding to pain killers, those were approved for use so whether or not the company knew they were addictive is a moral question not a legal one. A massive fine was also leveed against Purdue.

https://www.justice.gov/opa/pr/justice-department-announces-...

As for the water, I assume you mean Flint? What crime was committed?

dccoolgai• 4 years ago

This belief seems to be especially pervasive amongst tech industry: That because justice/law works at a slower speed than social media, it doesn't work.

Overtonwindow• 4 years ago

I still wait for Elizabeth Holmes to go to jail. I disagree that SBF will go to jail. American justice has a problem in that some people are just too rich, too connected, and too "pretty" to jail.

flumpcakes• 4 years ago

It will be a very interesting few years. I assume there's a lot less regulations for "cryto exchanges" than for any of the traditional finance companies. Perhaps SBF will skirt jail because of less regulations? Perhaps the "establishment" and traditional finance companies will use this as an opportunity to dismantle the "crypto" industry (and jail SBF for a long time) through regulations to beat down competition.

I don't see why people thought SBF and FTX was any different from any other billion dollar finance company. The old men in suits were young men in suits at some point. BlackRock, with it's trillions of dollars under management, is only 34 years old. There wasn't any change or a new era that was going to be ushered in by FTX/SBF. Just more financial crime, how long would have it gone unpunished if it wasn't for their own incompetence?

olalonde2• 4 years ago

American corruption aside, why does everyone expect the US to lead the prosecution of SBF? FTX was an international exchange. He could and should face criminal charges in dozens of countries.

pvarangot• 4 years ago

There was a US branch of FTX that SBF has been saying "has funds to make people whole" but is still under Chapter 11 "because he made a mistake declaring bankruptcy", and that branch in independent of the international exchange. US customers still can't withdraw their funds. I am not sure people want the US to "lead" everything as much as they want, as people that invested money on a US company, for the government to help them get it back after it was, allegedly, stolen.

jklein113• 4 years ago

Because nobody can put the boot on this kids neck like the US Government

__MatrixMan__• 4 years ago

I don't think the crypto world is patient enough to let the government (any government) handle things. So since we're making predictions: if no government acts within a year, I bet he'll be dead within three. I think they call that "slashing".

j4pe• 4 years ago

I actually registered a bet regarding his eventual conviction: https://longbets.org/922/

I was bothered by the level of rhetoric from high-profile people in technology predicting that the US justice system would never pursue SBF, because these claims seem to smuggle in the conspiracy that the US government is controlled by some cabal or hidden element. While of course the US government has many problems, these insinuations don't represent a serious take on the issue, and this FTX debacle seems to be simply a convenient opportunity for "network state" or techno-libertarian proponents to promulgate some more damaging untruths into an already poisoned information environment.

Nobody has yet taken me up on the bet.

mehphp• 4 years ago

He will definitely go to jail. He’s not a high-profile politician and he has harmed other rich people.

theptip• 4 years ago

This is one of those cases where “put your (play) money where your mouth is” / “skin in the game” really shines.

Anyone who wants to prognosticate on this subject should record their prediction on Metaculus or similar, and link to it. Anyone not going on record thusly should shut up.

__derek__• 4 years ago

Well, it didn't take a year or two.[1]

[1] https://news.ycombinator.com/item?id=33962083

jesuspiece• 4 years ago

He wont be going to jail, the fact that he's still walking around free is proof enough. He defrauded people out of billions but w/e I guess

throwawaysleep2• 4 years ago

Elizabeth Holmes and Jeffrey Skilling were free for years following the collapse of their schemes.

ngetchell• 4 years ago

His girlfriend fled and he is outside of the US. I'm not sure why you think that is proof.

ryanwaggoner• 4 years ago

This is a ridiculous piece. SBF isn’t some supergenius who is now executing a brilliant plan to avoid prison. He’s a naive idiot who is digging his own grave and will end up behind bars or dead. There is a 0% chance that he steals billions from rich and connected people and manages to skate because he blabs to a few people on social media and tosses a few pennies to some politicians. He stole billions, he’s going to prison if he doesn’t end up dead first.

joyfylbanana• 4 years ago

The article doesn't claim that he is a supergenius. He might be just dumb fuck giving those interviews. But anyway his one and only objective is avoiding jail and I think that is true. He doesn't give a fuck about customers etc, he only does what he does because he wants to avoid jailtime, whether it is dumb or smart is irrelevant.

tim_sw• 4 years ago

his parents are not naive idiots and I’m sure they’ve been giving him some form of counsel one way or another

notahacker2• 4 years ago

There is no reason to believe that his parents' counsel was "do as many interviews as possible, admit to as much as possible, and try to convince the public you're both a genius and completely ignorant of the basics of running a business", as opposed to the standard legal advice of "shut up and wait and see what the charges and evidence are (and who you can plausibly blame it on)".

I imagine some very clever people advised him on compliance best practises and not gambling customer funds that he wasn't entitled to touch either, but that didn't mean his actions were the outcome of listening to that advice

freejazz16• 4 years ago

oh my god, his parents are tax attorneys at a top law school, not like George Soros or something. All these responses about his parents indicate to me that a) they don't know what his parents do; b) they don't know what legal academics do; c) they don't know what lawyers do; d) they severely overestimate the social capital some tax professors have.

Scottn12• 4 years ago

Or he goes on the run soon and we never see him again. Someone who was fraudulently handling billions surely has a few millions somewhere that isn't accounted for. Other crypto scam artists have disappeared after taking funds. Ruja and Kwon are two I can think of and SBF had access to more money than either.

lzaaz3• 4 years ago

Everything Sam Bankman-Fried is doing is in singular pursuit of not going to jail

That's weird-shouldn't he be doing everything that's possible to go to jail? Everybody would like to go to jail.

AbrahamParangi4• 4 years ago

If he was actually committed to effective altruism, he should be trying to send himself to jail as an example to others to not do fraud.

lordfrito3• 4 years ago

SBF consistently demonstrates some serious next level thinking:

- Next level risk management: don't worry about it

- Next level defense strategy: talk as much as possible

- Next level EA: save the planet by killing the crypto space which is wasting energy

NateEag2• 4 years ago

A utilitarian effective altruist absolutely should defraud anyone not already on their team.

They precommit to others who are in on the take that 90% of the profit will go to the Cause, and then all that excess that was gonna be wasted on luxury or low-QALY retirement/dying years will instead go to places that generate more utils.

I wouldn't be shocked if a document (or, more likely, testimony in a trial) eventually turns up explicitly saying that.

(To be clear, I think the plan I have described is reprehensible, but that's because I'm not a utilitarian.)

boringg7• 4 years ago

The amount of comments in here who think that SBF is going to walk away scot free is unbelievable. I guess it goes to show how low trust is in the legal system. It's going to be a legal fight all the way -- and SBF has few friends and doesn't have any money - he's likely going to prison or spend the rest of his life in a country where he can't be extradited to the US.

Go look at Bernie Madoff as an example of someone who defrauded a lot of people and was much more respected then SBF was. Think people - don't just whine like a bunch of petulant children how the game is rigged.

edit: Scott to scot

throwawaysleep2• 4 years ago

It is the same mindless angry mob sentiment that has existed through the ages, from the crucifixion of Jesus to the burning of witches to the lynchings through the American South.

People bray for blood and deem the government corrupt and ineffective if it is not immediately provided.

avn2109• 4 years ago

"Scott free" is maybe a bit strong, but it's totally plausible that he'll walk away with a slap on the wrist. White collar crime is famous for leading to leniency.

philovivero• 4 years ago

"Scott free" is way too strong. Like, a whole extra T strong. It should be scot free.

All that said, I'm not sure how this will play out. He cozied up to the right people, but so did Epstein, and he... definitely did not get away scot free.

gadders2• 4 years ago

Conversely, look at how many of Maxwell/Epstein's clients that have been prosecuted so far.

bilvar• 4 years ago

The first case in history that a sex trafficker was trafficking victims to nobody.

boringg7• 4 years ago

But, for apples to apples sake, if were using equivalent examples - SBF is Epstein not the clients of Epstein.

totalZero3• 4 years ago

SBF has few friends

SBF was the second-biggest donor to the Dems in the 2022 midterm elections. Not only does he have friends, he also has a cadre of politicians who will look terrible in the case that their major supporter ends up rotting in prison. It is unsurprising that some people believe he could walk.

sfpotter• 4 years ago

Friends? Or fair weather friends?

Server6• 4 years ago

He also donated a ton to Republicans. He was trying to buy crypto regulation. Those people aren't his friends. If anything they see him as an embarrassment/liability now.

jamesboehmer• 4 years ago

He admitted he secretly donated an equal amount to republicans: https://gizmodo.com/ftx-sam-bankman-fried-sbf-secret-donatio.... They have his money and don't need him anymore.

smcl3• 4 years ago

We'll see, but I think the more likely outcome is that the recipients of the donations will realise it's more harmful to stick their neck out for him than it is to just step away. To be honest I don't even who all the recipients of his donations are and what they could possibly do to aid him, people are acting like he's basically bought the US justice system and is basically as good as acquitted.

selectodude2• 4 years ago

Madoff donated a ton of money to Democrats. Elizabeth Holmes literally hosted a fundraiser for Hilary Clinton. Both ended up in jail.

On the other hand, pardons under Republican presidents tend to be a who's who of white-collar criminal shitbags. If I'm doing crimes, I know who I'm donating to! Just look at this list!

https://www.nytimes.com/article/who-did-trump-pardon.html

MajimasEyepatch2• 4 years ago

It’s not like he’s a guy who’s been on the political scene for decades. He just popped up in the last couple of cycles, and his money is gone, so he’s easily replaced.

Plus, whether he goes to prison or not, he’s made every politician who took money from him look terrible, so whatever “friends” he may have bought have little to gain from sticking with him.

AnIrishDuck• 4 years ago

Madoff was also a big political donor [1]. Most politicians (credibly) claimed they were unaware of his shenanigans and returned his money.

Probably exactly what's going to happen here.

[1] https://en.wikipedia.org/wiki/Bernie_Madoff#Government_acces...

mikeyouse• 4 years ago

Much of his financial support was to Democrats in primaries -- so it was literally spent against democrats as much as it was in support of them. Over 1/4 of his 2022 giving was to a single candidate in Oregon (Carrick Flynn) who was running against a well-liked Democrat incumbent (Andrea Salinas). Flynn lost, SBF spent nearly $1,000/vote in that primary, and basically garnered zero 'power' from that spending. If anything he antagonized the actual power brokers by diverting their resources to support a candidate that otherwise would have won without intervention.

dtjb• 4 years ago

All the more reason why politicians won't throw him a lifeline. They gain nothing at this point by defending or supporting him.

It's not entirely the same, but we saw this with the Elizabeth Holmes case. The powerful people that supported her early on became her biggest detractors when the shit hit the fan. Their reputation was tarnished by association. They severed all support and publicly decried her as a fraud. We're already seeing the same [1] with SBF.

[1] https://www.bloomberg.com/news/articles/2022-11-17/bankman-f...

faefox• 4 years ago

If only he'd donated to the GOP, he could've scored a preemptive Trump pardon!

wpietri3• 4 years ago

Your theory is that the people are so very corrupt that they are taking money to betray their country, but so loyal that they'll defend a guy who won't be able to do anything for them ever again?

It just doesn't make sense. SBF is already notorious and will be for a long time. Whether or not he's convicted in the US, that's already guaranteed, especially since other countries may go after him. The best thing Democrats (or Republicans if they took his money) can do for themselves is to very publicly get him to face justice. Which is why you see the chair of the House Financial Services Committee inviting him to come talk in front of Congress. Corrupt or not, their best line of action is to demonstrate independence and grease his slide to a long prison sentence.

jjfoooo6• 4 years ago

A prominent new donor gets is responsible for a massive financial collapse and likely fraud, resulting in major losses for retail investors. Options are:

1. Claim ignorance of shady practices and disown donor.

2. Pull strings to avoid a real prosecution, and claim the guy did nothing wrong.

People really think politicians are going to choose option 2?

testfoobar2• 4 years ago

This is a Dec 2 tweet from Representative Maxine Waters, Chairwoman of the House Financial Services Committee:

".@SBF_FTX, we appreciate that you've been candid in your discussions about what happened at #FTX. Your willingness to talk to the public will help the company's customers, investors, and others. To that end, we would welcome your participation in our hearing on the 13th."

https://twitter.com/RepMaxineWaters/status/15986938112528752...

She backtracks a bit afterwards.

fortuna866• 4 years ago

He was also the second largest donor to Republicans, which he did in secret to avoid criticism from liberal friends.

https://www.theguardian.com/technology/2022/nov/30/ftx-billi...

MajimasEyepatch2• 4 years ago

Also Elizabeth Holmes and Sonny Balwani, who were just convicted in the last year. And Martin Shkreli and any number of other high-profile white-collar criminals in the last decade. The system is deeply flawed, but there is a threshold above which highly public, blatantly obvious crimes do get prosecuted (provided you’re not the President, anyways).

unethical_ban• 4 years ago

I feel that faith really is a component of things getting better in society. No matter how bad things are, we collectively have to believe and expect them to get better, in order for us to figure a way out of bad situations and in order to hold leaders accountable in the long term.

It grates on me like no other when people not only make observations, but give off nihilistic hopelessness of anything ever possibly having an alternate outcome.

To view corruption or inequality as "just the way things are" is to permit it and tacitly support it.

Take 2: Some of these comments could be bad-faith nation-state trolls on a broader mission to undermine American citizens' faith in government, but I don't think HN has been targeted as much as say, reddit.

wpietri3• 4 years ago

I guess it goes to show how low trust is in the legal system.

I think it's more about trust in propaganda. Both parties take a ton of money, and some of it always turns out to be from dubious people. A lot of those dubious people go to jail. But this "SBF hasn't been arrested in the first 20 minutes so Democrats are corrupt" line is one I've seen as a talking point all over the US right. But it never comes with any perspective.

E.g., we could look at Elizabeth Holmes. As Wikipedia says, "The credibility of Theranos was attributed in part to Holmes's personal connections and ability to recruit the support of influential people, including Henry Kissinger, George Shultz, Jim Mattis, and Betsy DeVos, all of whom had served or would go on to serve as U.S. presidential cabinet officials." Republican cabinet officials, I should add. It was more than 2 years between Carreyrou's bombshell article and her indictment.

Do I believe that she got a lot of money and cred from cozying up to politically prominent individuals? Definitely. Do I believe that delayed the investigation? No, complex crimes, especially ones with intent requirements, require patient, careful investigations. And I don't even recall anybody saying that she wasn't immediately arrested because she was politically connected.

civilized• 4 years ago

I think it's more about trust in propaganda. Both parties take a ton of money, and some of it always turns out to be from dubious people. A lot of those dubious people go to jail. But this "SBF hasn't been arrested in the first 20 minutes so Democrats are corrupt" line is one I've seen as a talking point all over the US right. But it never comes with any perspective.

So much "news discourse" today comes from people who have lost their minds to partisan politics. With every news item, the only question they ask is "how does this prove that my side is 100% right and very unfairly treated".

It's not even the partisanship that is annoying about this, it's the straining for a connection. A lot of things don't have a meaningful connection to partisan politics, and trying to force it constantly leads to a lot of uninteresting noise.

It's as if there were millions of people constantly trying to relate everything happening in the world to Weird Al Yankovic. Except that would at least be funny.

lettergram2• 4 years ago

Republican cabinet officials, I should add.

It’s worth noting that the “right” doesn’t consider these people you mention as the “right”. It’s the same reason Joe Biden will say “MAGA Republicans”. The Republican base is almost entirely different than the elected officials (same with most of the left btw).

I recommend the book “the new right” by michael malice

The right views much of their political leadership with contempt. They equally view them as the “enemy”, perhaps more-so.

When people hear “he donated to both parties” what the people on the right here is “they donated to my enemies”. The “MAGA Republicans” mostly are concerned about illegal immigration, off shoring of jobs, corruption, globalism, etc. Republican leadership and SBF openly worked against their interest. It’s colloquially called the “uniparty” for a reason

ajross• 4 years ago

The amount of comments in here who think that SBF is going to walk away scott free is unbelievable. I guess it goes to show how low trust is in the legal system.

It's more that it reinforces the priors of the people making the accusation. People can "celebrate" the potential non-prosecution since it sits as evidence for the corruption of the government folks want to believe is there.

And the test will be when Bankman-Fried ultimately is prosecuted, none of these folks will celebrate the actual event as evidence of justice being done. It will be "too late", or "too little", or there will be another whataboutist argument about something that should be happening instead or in addition. (Edit: or more likely and horrifyingly circular, by removing agency from the government and claiming credit: "He was only prosecuted because The People demanded it!").

MuffinFlavored• 4 years ago

and SBF has few friends and doesn't have any money

He wasn't able to "sneakily" siphon a few billion off to the side for himself?

AbrahamParangi4• 4 years ago

People believe (rightly!) that law follows power. I think the Epstein trial and general incuriosity about who among the rich and powerful had committed great crimes led many to this realization. It’s not supposed to be true in a society with rule of law but it does appear to be at least somewhat true in our society.

People notice the kid-gloves treatment he’s been getting in the media (and from congress!!). And people assume that power is not against him, and so people are pessimistic.

I don’t think any of this is unreasonable, although it is incompatible with many beliefs that people often hold dear.

jmull• 4 years ago

Epstein went to jail...

mattbrewsbytes• 4 years ago

Madoff admitted to his crimes (once his family turned him in I believe) which made that go much faster. It will likely take years for DOJ to build a case. From what I've read they tend to be very meticulous once they believe they have a case that is winnable.

I think he and/or others will likely be in federal prison at some point but it will take a lot longer than the hot-take-minute culture of the internet would like. He also has no source of income (right?) to keep greasing the legislative wheels (aka political donations) to get laws/rules written in his companies favor as far as regulations go.

klyrs• 4 years ago

edit: Scott to scot

TIL https://www.phrases.org.uk/meanings/scot-free.html

boringg7• 4 years ago

Damn, was right all along - thanks.

scifibestfi• 4 years ago

It's distrust in the elite who, frankly, have earned it.

The 2008 bank bailouts were the last straw for many.

Epstein was the last straw for many.

Covid mismanagement was the last straw for many.

mythrwy2• 4 years ago

I'd add Iraq to the list.

fortuna866• 4 years ago

Yes because the people running human societies have traditionally been transparent and fair until 2008.

Conspiracy thinking is not new, the mobilization and scale of social media allows the "othering" of people to reach a level we haven't seen since the second world war. And that's frightening.

RC_ITR7• 4 years ago

Be careful directly comparing Madoff to SBF. Madoff admitted his crimes (hat's why it was so speedy).

SBF is more like Ken Lay, and that took 3 years for the Feds to build their (ultimately successful) case.

bmitc• 4 years ago

The amount of comments in here who think that SBF is going to walk away scot free is unbelievable. I guess it goes to show how low trust is in the legal system.

I think it's history that shows this and builds this low trust. The 2008-2009 housing and economic crisis had effectively no prosecutions that came to fruition. Bury things in sufficient complexity, and it's easy to get away with it. The thing about Elizabeth Holmes is that she wasn't actually wealthy or powerful. That's why she's going to prison, which to be clear, I agree with but I also think a lot of financial criminals belong in prison. Sam Bankman-Fried is in that same boat, but he does seem to have some strange connections that are a little more engrained than the board members Holmes had. So we'll see. I think he'll be prosecuted and likely go to jail, but I also see it maybe just not happening. I just wish we'd see the same reckoning for other fraudsters who are bit better in hiding their malfeasances.

posterboy3• 4 years ago

I think it's history that shows this and builds this low trust. The 2008-2009 housing and economic crisis had effectively no prosecutions that came to fruition

They must have been busy prosecuting and seazing assets from thousands of debtees.

pas3• 4 years ago

The 2008-2009 housing and economic crisis had effectively no prosecutions that came to fruition.

Because it was not a crime at that point to bet against common sense.

Bury things in sufficient complexity, and it's easy to get away with it.

Yes, but that's why there's the whole system of independent government institutions, staffed by specialists, and they are supposed to understand the complex aspects of economy/society, recommend specific actions, warn legislators, publish summary statistics, ask for better tools, etc.

And as is tradition these institutions are themselves used as political tools, are suffering from regulatory capture, are underfunded, and ineffective.

Just as the SEC was "asleep" the FDA/FTC was too.

*But* it's very important to not forget that, even though everyone wants magically better institutions, just making laws stricter and other "brute force" solutions don't lead to better institutions, they lead to more government control over society, which is rarely a net positive.

I just wish we'd see the same reckoning for other fraudsters who are bit better in hiding their malfeasances.

Yeah, but that's mostly consumer protection. Which is soooo laughably missing nowadays. Amazon gets away with filling the planet with junk. People already don't want to spend effort on safety if it would come at the cost of some individualism.

Spinnaker_• 4 years ago

Madoff was constantly swarmed by the press and had multiple physical altercations with them.

SBF was invited to prestigious $2500-a-seat event by the NYT.

Something is very, very different about these situations.

eschulz• 4 years ago

So many things are different. Two things are that Madoff, unlike SBF, admitted to fraud as his company blew up. Also SBF's relationship with the Bahamas is certainly a complicating matter that will only serve to help him as he delays the inevitable arrest.

fortuna866• 4 years ago

SBF was invited to prestigious $2500-a-seat event by the NYT.

Where he was grilled about possible crimes.

MivLives• 4 years ago

Justice is a steam roller not a Porsche.

bagacrap• 4 years ago

His father is a law professor at Stanford. He has friends and money alright.

boringg7• 4 years ago

I would wager anyone in academia right now wouldn’t touch this with a ten foot pole for the risk to their own well standing. He is a pariah at this point.

braingenious• 4 years ago

SBF has few friends and doesn't have any money

I think that the skeptical people would disagree with this statement, especially since the only source to that is SBF himself.

There is about $3.3 billion in loans to himself and an entity that he controls (Paper Bird) that is still unaccounted for. 3 billion dollars can buy a lot of friends.

Ekaros3• 4 years ago

I believe SBF is exactly a case that will be end up thrown away. Despite donations and connections. No more money coming in and he is on top of too much media. Useful idiot that can be cut.

the_cat_kittles• 4 years ago

"I guess it goes to show how low trust is in the legal system"

...

"SBF has few friends and doesn't have any money - he's likely going to prison"

that seems like a pretty damning indictment of the legal system right there

comte7092• 4 years ago

Seriously, I’d challenge people to name a legal case this high profile in recent memory where there wasn’t a prosecution.

It’s become cool to be cynical about everything in American politics, but the fact it’s that it’s just cover for blatant ignorance and laziness.

gorbachev• 4 years ago

This is a great article about the difference between Madoff and SBF, and also why the wheels of justice turn very slowly on financial crimes. Worth a read, for sure.

https://nymag.com/intelligencer/2022/12/why-hasnt-sam-bankma...

To your point. Madoff gave himself up. He confessed to his crimes and didn't even want an out. He more or less gave up defending himself in a meaningful way.

michaelt• 4 years ago

The amount of comments in here who think that SBF is going to walk away scot free is unbelievable.

Well, it depends on what example you want to compare SBF to.

Maybe this will be like Bernie Madoff, and SBF will die in jail.

Or maybe this will be like the 2008 financial crisis, with barely any punishment and most of the people who caused the crash gifted billions of dollars of taxpayers' money.

Maybe it will be like Elizabeth Holmes, and SBF will get 10 years in jail.

Or maybe it will be like the Panama Papers and Paradise Papers, where there appear to be substantial crimes revealed, and yet somehow nobody gets prosecuted.

Maybe it will be like George Floyd, and stealing $20 is enough to get someone killed on the spot, let alone a billion dollars.

Or maybe, like Ghislaine Maxwell was prosecuted for trafficking minors to have sex with... nobody, apparently... it'll turn out any evidence of other people's involvement has somehow vanished in a puff of smoke.

Maybe it will be like Enron's Kenneth Lay, and he'll be found guilty and face a big jail sentence.

Or maybe, like the Bhopal disaster or the Deepwater Horizon oil spill, the corporation will pay some money but despite corporations being comprised of nothing except people, somehow no people will face any punishment.

My intuition is SBF won't manage to avoid prosecution - He hasn't managed to spread the blame thinly enough, he isn't a prince, and $70 million in donations don't make you into Scooter Libby. But in the American justice system, it can really go either way.

ac29• 4 years ago

Notice just how little has been said by other top FTX/Alameda people? Gary Wang, Nishad Singh, Caroline Ellison, Sam Trabucco, etc? Those people are trying to not go to jail.

Sam seems to be taking an approach of "they cant indict me if I dont stop confessing to crimes".

texasbigdata• 4 years ago

Plea deals? :)

yardie• 4 years ago

Just going to point out that federal grand juries are secretive as hell. And they take a super long time. FTX imploded weeks ago and I don't expect an indictment to be handed down before the end of 2023.

Theranos started to collapse in 2015 before going bankrupt in 2018. And the founders were only convicted now. 7 years after journalist and investors started really looking into them.

ckozlowski• 4 years ago

"The wheels of justice grind slowly, but boy do they grind." - Ken White

mjhay• 4 years ago

often to dust

throwawaaarrgh• 4 years ago

Can we stop with the obsession over this dude / FTX / crypto? I know that's like asking Reddit to stop making everything a joke, but here's hoping maybe we're mature enough to stop gossiping and praying for someone's downfall. Life is too short to spend your time obsessed with negativity.

BowlGambit• 4 years ago

This site is far from being overrun with FTX stories, and .. why shouldn't stories of massive fraud be talked about? It's easy to ignore - there's plenty of other stuff to read about

that_guy_iain• 4 years ago

Does anyone blame him for doing everything he can to avoid going to jail? The amount of money that has gone missing and the amount of money some of the victims will still have this is almost certainly going to end up with a criminal case.

KolmogorovComp• 4 years ago

On which ground would SBF be prosecuted?

From what I understand, dealing only with unregulated crypto assets mean he didn’t have any obligation on how he invested those (nor provide any safety guards for his investors).

ksherlock• 4 years ago

He collected American VC money, which means wire fraud, etc. BUT his book keeping was so shitty he didn't even know it was fraud and thus lacks mens rea

notch656a4• 4 years ago

IANAL but my understanding is reckless disregard is mens rea, whether the result of that disregard was intentional or not.

DennisP2• 4 years ago

You don't get a free pass on fraud just because it's crypto, or any other unregulated asset. SBF and his company lied about how they were handling customer assets.

tommiegannert• 4 years ago

I'm guessing he's spoken to lawyers, and what he says is a result of some locked in strategy. (Though he also seems to be a professional rambler and deflecter.) However, I'm surprised that SBF hasn't played a card like "while I didn't know it at the time, I have now investigated and concluded that..." to (a) show he was sincerely clueless and (b) set the stage for muddying what he knew before and after blowing up.

If I end up in SBF's situation (it can happen to anyone, right?) why should I not use this tactic? Would admitting knowing anything hurt his case, even if the knowledge was gained after leaving the company?

andsoitis• 4 years ago

while I didn't know it at the time

In a court, under oath, this won’t fly.

vrc• 4 years ago

Both his parents are/were professors at Stanford Law School, so that’s a fair guess.

species96062• 4 years ago

Indict them too. There’s every indication that they were beneficial participants of the scheme.

danaris• 4 years ago

it can happen to anyone, right?

Sure...anyone who's thoroughly unscrupulous and willing to do whatever it takes in pursuit of wealth and power.

If you think that describes everyone, or even a supermajority, then I'd suggest you lay off the Cynicism Flakes for breakfast for a while and get out of what I'd suspect to be a very wealthy bubble.

sigstoat• 4 years ago

I'm surprised that SBF hasn't played a card like "while I didn't know it at the time, I have now investigated and concluded that..."

unless that's true, it's another way for the prosecution to hang him, because they might be able to prove he _did_ know.

syrrim• 4 years ago

Your statements can and will be used againt you, but they will never be used in your favour ("hearsay"). If you have something to say, wait to say it on the stand, in front of a jury. Until then, it will hurt you, and it won't help you.

dragonwriter11• 4 years ago

I'm guessing he's spoken to lawyers, and what he says is a result of some locked in strategy

I mean he very publicly fired his top-flight law firm and disparaged the advice of lawyers generally very early on in the “keep talking” strategy, so, yes, he has spoken to lawyers...

But while he now has new counsel, I don’t think there is much evidence other than belief that “people notorious for publicly dismissing risk as a valid consideration before having massive fraud empires collapse around their head are not the kind of people to act recklessly and imprudently” supporting the idea that his behavior is part of a carefully planned strategy.

Quinner• 4 years ago

His lawyers fired him because he wouldn't shut up. https://futurism.com/the-byte/sam-bankman-fried-lawyers-quit...

notch656a4• 4 years ago

I read the TOS. SBF is deliberately getting people to focus on "e-money" part rather than "digital assets" like crypto.

Y'all got tricked by focusing on the wires and fiat currency path. The TOS make it clear that's all play money. Only digital assets appear to be protected by TOS. Coffeezilla managed to lock him down on that by using the correct terminology and asset classes, but most of the interviewers did not.

Based on the TOS customers agree to, it's not clear to me there was ever any agreement Alemeda couldn't bet the farm using customer fiat as collateral. Digital Assets appear to only apply to non-fiat digital assets -- the TOS seperately defined fiat balance as 'e-money' with significantly weaker as far as I can tell protections.

That is to pin him on fraud it may be necessary to show those that delivered crypto outside of the margin / borrowing TOS had their money stolen. I think Coffeezilla got him to admit this, but even then I think he may have weasled out of it by only talking about dollars which don't appear to be protected by the contract. He is crafting a very carefully executed story where he tricks you into thinking you have a 'gotcha' but all he did was admit to stuff customers agreed to in TOS; and thus you see the real intelligence of SBF as a master of redirection shining.

DennisP2• 4 years ago

Here is coffeezilla's third session with SBF, in which he seems to get SBF to admit that customer's funds were commingled in violation of the terms of service. People who did not sign up for anything risky nonetheless lost their digital assets.

https://www.youtube.com/watch?v=4o_jPzBZSIo

notch656a4• 4 years ago

That is a great interview. But it turns out Coffeezilla got tricked here by letting SBF turn back to the fiat funds.

SBF did not admit to fraud. The TOS specifically defines 'e-money' separately from digital assets. As soon as customers liquidated their digital assets to withdraw real money, they were no longer protected by the digital asset part of the TOS. The comingling of fiat / e-money is not disallowed by the TOS. Only comingling of digital assets was prohibited.

Coffeezilla was so close to pinning SBF here but by letting him wiggle out by dropping the digital assets and focus on comingling of e-money during withdrawals (which was not protected) SBF escape again. That is by liquidating the digital assets by the TOS, FTX was then allowed to commingle their e-money and the 'fungible' withdrawal process was not against TOS. Coffezilla should have pinned down SBF about digital asset withdrawals instead of fiat withdrawals. If he had forced SBF to admit BTC, ETH, etc withdrawals were comingled then he would have had a fraud admission, and actually Coffee started out with that before SBF quite quite genuise-ly redirected to fiat withdrawals.

I think this was a carefully crafted redirection by SBF to trick Coffee into thinking he got his 'gotcha' while SBF again escaped.

ankaAr• 4 years ago

I still don't know how people could trust someone named BankMan-Fried their money.

cjensen• 4 years ago

Oh my goodness no! I'm not sure what SBF thinks he is doing, but he is definitely maximizing his chances of going to jail.

He is making his future defense lawyer's job very difficult by committing to a story. The lawyer will be severely constrained from suggesting alternate explanations of the facts to the jury because SBF has already negated so many possible interpretations. Every time SBF overstates an explanation, the prosecutors get that into the record. Every time SBF provably misstates or misleads in an interview, the prosecutors get to say "take a look at this slime ball."

When under investigation, you shut up. It's the only smart thing to do.

latchkey• 4 years ago

Exactly. From the king himself...

https://twitter.com/MagicalTux/status/1598113040918249473

runeks2• 4 years ago

Ah, Mark Karpeles. The OG of bankrupt crypto exchanges.

jpeter• 4 years ago

And he admitted to commiting fraud: https://www.youtube.com/watch?v=4o_jPzBZSIo

runeks2• 4 years ago

Go on… where in this 23-minute video does this happen?

darawk• 4 years ago

I think one thing to keep in mind here is that, while everything you said is true for most ordinary defendants, Sam's parents are both highly regarded Stanford law professors. They have both been spotted in the Bahamas with him, and are certainly giving him counsel here, not to mention any whiteshoe legal team he's hired. Sam may be a lot of things, but he's not an idiot. There is no doubt that what he's doing is part of a calculated strategy, and it is a virtual certainty that that strategy has been approved of by legally serious elements of his defense team.

Whether or not it works time will tell, but it's a mistake to think that he's just a fool running his mouth.

andrewflnr• 4 years ago

Just because he's getting good advice doesn't mean he's taking any of it. Indeed he has said he isn't; is that part of the advice, to pretend he isn't listening to it?

Pride is a powerful drug that can make people think they're immune to all kinds of harsh realities. Clever fools abound. If it's a calculation, it sure looks like he's bad at math.

audunw• 4 years ago

I'm wondering if he actually assumes he will have to go to jail, and is trying to use this situation to get as much attention as possible, perhaps hoping to become "famous" so people will hire him for.. something.. when he gets out of jail? Seems like there's always someone wiling to work with you if you're famous enough.

I dunno, I'm probably wrong. Most likely he's just not very smart. That fits the evidence considering what we've heard about how he ran the company

jmyeet• 4 years ago

Every time SBF speaks publicly or gives an interview is further proof he is delusional or an idiot because he either hasn’t retained personal legal counsel or is ignoring their advice.

Any lawyer will tell you to shut the F up [1]. No good can come from speaking at this point.

This case is so egregious (ie stealing custodial assets) that he will spend the rest of his life in prison or on the run.

If something is a grey area you might be able to buy your way out politically but this isn’t it.

Classic example: after the Mar-e-Lago raid Trump made statements about how those documents were his and he declassified them. What did this do? It removed the possible defense of not knowing they were there. And he gained what? Nothing. At best it was political points with people who were on his side anyway.

There is nothing smart about SBF talking.

[1] https://youtu.be/sgWHrkDX35o

synergy20• 4 years ago

Of course, he has a professor father lecturing laws in Stanford university, I guess they had a plan right when the fiasco hits, any move since then must be designed meticulously to avoid being charged, what a shame.

Comparing to SBF, Holmes is nothing.

adamsmith1435• 4 years ago

Is this believable? Has a crack team of Lawyers really told him "definitely run your mouth on every podcast you can on the off chance that this will cause hung juries or mistrials in your future criminal cases" instead of "shut your damn mouth now"??

kipchak6• 4 years ago

It might not cause mistrials, but you might influence public perception enough that jurors are more sympathetic. SBF is painting a picture of young altruistic but inexperienced guy, who got too caught up in things and wasn't paying enough attention and allowed mistakes to happen underneath him which he feels really bad about.

If you figure you're probably going to stand for some sort of trial anyway it might not be a bad approach.

bmj• 4 years ago

This assumes that the average potential juror knows who SBF is, or what he's done. Yes, the average HN reader, or Twitter user, knows all about crypto and the players, but they do not represent the average U.S. citizen at all, even if the trial was held in SF.

anotherman554• 4 years ago

Jurors are told to only take into consideration what evidence is presented at trial.

If he admits to crimes during a podcast it's guaranteed jurors will hear it at trial. If he says he a "werry sorry little boy" during the podcast there's zero guarantee the juror will hear it and zero guarantee they'll take it into account at trial.

I'm having a hard time seeing how it's a good approach.

rideontime• 4 years ago

Not sure how you got that impression from the article.

He repeatedly emphasizes that he’s speaking against his lawyers’ advice (no kidding), because by god he just wants to help.

adamsmith1435• 4 years ago

He's playing chess you're playing checkers. His lawyers told him to say that too. (according to the 5-heads who think he is doing this on purpose and not out of ego/stupidity.)

jordan_curve• 4 years ago

I'm not really sure I buy it. It seems to me more likely that he's just still incompetent and sort of addicted to the spotlight. He was one of the most popular and well-respected people in the world in a certain sub-community and he did that all while playing league of legends every day.

It might be some master plan, but it really also might just be him not wanting to accept that it's over.

I have a hard time imagining any remotely rational person wouldn't realize to just not say anything to anyone without a lawyer present.

TheBlight• 4 years ago

His behavior is so absurd it almost makes me suspect he's being forced to give these insane interviews.

maxbond2• 4 years ago

From his interview with NYT on Nov. 14[1]:

Shortly before the interview, Mr. Bankman-Fried had posted a cryptic tweet: the word “What.” Then he had tweeted the letter H. Asked to explain, Mr. Bankman-Fried said he planned to post the letter A and then the letter P. “It’s going to be more than one word,” he said. “I’m making it up as I go.”
So he was planning a series of cryptic tweets? “Something like that.”
But why? “I don’t know,” he said. “I’m improvising. I think it’s time.”

I think he's still winging it, and that he's taken it in a pretty weird direction. I think he's trying to pull off some sort of hail-mary. In the Tiffany Fong interview [2], it seemed like he was trying to manufacture popular support for a return to FTX. He had a story about how he shouldn't have filed for bankruptcy, how money came in immediately afterwards, and how "they" weren't letting him fix things at the company even though "they" knew he could.

It was an odd yarn, but the only purpose for it I can imagine is trying to drum up a pressure campaign so he could be reinstalled as CEO.

So I don't think he's exactly trying to stay out of jail, I think he's experimenting to try and figure out what might be possible and whether he can somehow come out on top. But that it's desperate and inept so it's just baffling from the outside and almost looks like he's trying to go to jail. But I do think he's doing it out of his own will.

[1] https://www.nytimes.com/live/2022/11/30/business/sam-bankman...

http://web.archive.org/web/20221115024748/https://www.nytime...

[2] https://youtu.be/6DezodR9hNI

adam_arthur• 4 years ago

In a way, speaking publicly like nothing's wrong somewhat normalizes the impression that everything was above the board. Perception can certainly shape public expectations. Might be his angle/strategy

Of course, anybody that digs even a second beyond the headlines realizes it was blatant fraud

627467• 4 years ago

I would correct the title to "doing everything in persuit to minimize any negative judicial outcome possible".

Maddoff was portrayed as cold hearted criminal and got 100+ years in jail. SBF is trying as hard as he can to paint a different picture for himself. And the media/society are giving him this chance.

Negligence/amateurism is way better image than cold hearted criminal intent.

dragonwriter11• 4 years ago

Publicly admitting to crimes while firing to top flight law firm, which you later replace with one of your parents academic colleagues is maybe not what a sane persom in a “singular pursuit of not going to jail” does.

Sure, he's reputation washing, but that’s less to avoid jail and more for future business opportunities, whether or not he goes to jail.

species96062• 4 years ago

The reputation washing will have a mixed effect, since he’s portraying himself as both innocent and incompetent. Not sure I’d do business with someone like that.

dragonwriter11• 4 years ago

I'm definitely not commenting on the effectiveness of his reputation washing, just my view of its aim.

notahacker2• 4 years ago

I don't think he has any future business opportunities (beyond maybe being "that notorious guy" on the after dinner speaking circuit), not even in crypto.

I think he probably believes he is both successfully reputation-washing and setting the foundations for a legal defence, but the whole reason he's in this position in the first place is that his gambles didn't pay off...

2devnull3• 4 years ago

Probably because of this:

“When asked by Reuters why the couple decided to buy a vacation home in the Bahamas and how it was paid for -- whether in cash, with a mortgage or by a third party such as FTX -- a spokesman for the professors said only that Bankman and Fried had been trying to return the property to FTX.

"Since before the bankruptcy proceedings, Mr. Bankman and Ms. Fried have been seeking to return the deed to the company and are awaiting further instructions," the spokesperson said, declining to elaborate.“ https://www.reuters.com/technology/exclusive-bankman-frieds-...

rqtwteye2• 4 years ago

This guy is the classical example of the old saying "Honesty is the key to success. If you can fake that, you have made it.". He is probably working on getting pregnant too.

brettermeier• 4 years ago

This made me laugh hard, sry for my Spam post XD

harambae2• 4 years ago

The original quote is sincerity, but yes.

"The key to success is sincerity. If you can fake that you've got it made." -George Burns

rqtwteye2• 4 years ago

I looked it up too. Seems there are a lot of variations on this and nobody really knows exactly where it comes from. I bet the ancient Egyptians already had a saying like this.

politician2• 4 years ago

CoffeZilla got a public statement from SBF that it was business-as-usual to comingle funds between customers using the margin trading product and the savings account product. That's a huge admission.

https://www.youtube.com/watch?v=4o_jPzBZSIo

vlunkr• 4 years ago

Seems like the real winner here is coffeezilla. I hadn't heard of him until this disaster, now he's everywhere.

https://socialblade.com/youtube/c/coffeezilla

danjoredd2• 4 years ago

Been following him ever since he collabed with SomeOrdinaryGamers on a deep dive of influencer crypto promotions, and how every one of them in full knowledge promoted scams. He's been at this for a while, and I hope that the stuff he turned up will be enough to build a case against SBF.

TheLoafOfBread• 4 years ago

I did not know about him before this blow up, but looking into his history, he actually pointed that SBF and FTX is doing Ponzi scheme 7 months ago.

https://www.youtube.com/watch?v=C6nAxiym9oc

xiphias2• 4 years ago

He deserves it with his last interview:

https://www.youtube.com/watch?v=4o_jPzBZSIo&t=1s

He collected enough evidence to put SBF in jail.

danjoredd2• 4 years ago

Coffeezilla actually crashed his call a third time and managed to get him to accidentally admit to fraud. I imagine that call might even be used in the court case as evidence when it happens

tptacek• 4 years ago

Everything this idiot says to any random interviewer from any random media outlet is ammunition for his inevitable prosecution. He's already said incriminating things; for instance, his Dealbook Summit interview established some of the predicates for wire fraud.

Perhaps as importantly, every element of his story that he tells constrains his defense. Whatever arbitrary "facts" he lays out in public now, he won't be able to effectively contradict at trial. He's pinning himself down a variety of ways.

It takes years to bring a complicated federal financial services fraud case to trial. We're barely into the top of the first inning. Be suspicious of people with bad analyses of what's happening right now, like the idea that SBF is somehow serving his own best interests by speaking publicly about this stuff.

pyrophane• 4 years ago

They kind of hint at this but I think it is really a mix of staying out of jail and saving face a bit. I do think he cares about his reputation.

That being said, the notion that he is going to get out of this seems a bit silly to me. So far his best attempt has been to claim that he really just had no idea what was going on. It seems extremely unlikely to me that either: 1) that was in fact the case! or 2) it isn't the case but somehow there isn't any evidence to the contrary!

Octokiddie• 4 years ago

The central issue is whether FTX user funds were used in violation of the terms of service. Whenever that question comes up, the open and honest SBF rolls over and plays dumb. He doesn't have the details. His dashboard didn't show it. He lost track of "important things." He doesn't "know what to tell you."

Everything was an "embarrassing mistake."

SBF's problem is that the only way for FTX to become insolvent is that user funds were being used in violation of the terms of service.

garbanz0• 4 years ago

I would love to hear about any actual crimes he committed before wishing he goes to jail. It feels like the mob has already decided he's guilty.

lacoolj• 4 years ago

"And when those people have requested an interview with Bankman-Fried, he’s turned it down."

The very next quote from SBF: "... I'm not sure that will happen by the 13th. But when it does, I will testify."

This article is contradicting itself.

coldtea4• 4 years ago

Don't know for sure about SBF, but he legitimately could be what he shows (someone over his head).

I get big cruelty lynch mob or hit-job vibes from TFA author though.

veritas20• 4 years ago

There may be more parallels to SBF and Jon Corzine than to Bernie Madoff. SBF and Corzine ran companies that were regulated by the CFTC which requires segmentation of client funds from corporate funds. Both SBF and Corzine failed to provide the appropriate systems and safeguards to prevent the intermingling of client and corporate funds. Only time and evidence will tell if SBF knowingly and intentionally siphoned client funds for nefarious intent. The situation can get more murky if usage/terms of services policies existed for the alt-coins that were used. In Madoffs' case, there was a point that no investments were being made and new money was being used to pay/boost returns of existing clients which doesn't seem to be the case with FTX.

2devnull3• 4 years ago

He is clearly making himself a scapegoat to protect himself from the wrath of the politically powerful. One thing to burn rich people, quite another to burn politicians who chair the financial services committee.

Anyone who says, “what’s he doing!? He must be stupid or crazy!” is either dishonest ir not very perceptive.

He is throwing himself under the bus in hopes of an eventual pardon or just to avoid pissing off the powers that be, who he helped secure with his kick backs (“contributions”).

But the foolish masses are likely to buy the whole, “he is stupid” narrative.

Clearly, he is not,

adammarples2• 4 years ago

I sort of disagree. He had a money printing operation and somehow wound up blowing half of it on bad bets, losing the rest criminally, and now blabbering without a lawyer. If he's playing 4d chess I'll be amazed to see his endgame working out.

2devnull3• 4 years ago

So you think he is literally stupid?

Do you know who his parents are? If so, do you think he is really “without a lawyer”?

It’s hard for me to not think you just don’t know the full context. I assume you aren’t being disingenuous, but maybe you just haven’t followed the news closely enough to understand. Or maybe you know something I and others do not. If so, please share the info.

kerryoco2• 4 years ago

i dont think theres any 4d chess involved, the poster is just saying that what appears to be self effacement is actually alignment with the greater powers that be. the story looks better for them this way. say you're bartending in the trendiest club in town and you spill some drinks on the VIPs. you agree to whatever punishment the VIPs dispense, because you dont want the punishment of the club owner.

Whatarethese• 4 years ago

This dude is totally going to prison. He robbed rich people. Elizabeth Holmes is in prison and she stole from investors.

indymike• 4 years ago

SBF would be wise to follow some very simple advise: when you find yourself in a hole, stop digging. Everything you do to cover up a crime ends up being a crime, too.

mannykannot• 4 years ago

I imagine that, behind the scenes, SBF and Ellison are each lawyering up with the intent to throw the other under the bus. If so, then may they both succeed!

I also suspect that SBF finds it inconceivable that he cannot talk his way out of this situation with the same approach that he used to talk his way into it. He will find, however, that the skepticism is much more overt and widespread than when everything seemed to be going swimmingly.

ted_bunny• 4 years ago

Someone else's thesis (quoted at the very end), no analysis, just a bunch of links. Interesting topic so the article is readable by default, but this feels like a seriously low-quality submission. Am I off-base here?

kerryoco2• 4 years ago

how much time should he do, HN? he seemed to willingly avoid thinking of money as real. but we also have a financial system where this could even happen. i feel those 2 factors should be weighed against each other.

Scottn12• 4 years ago

And he is very carefully setting the tone with carefully constructed statements that this ISN'T what he did and it makes me sick. He knows the more he says things like:

"A mistake that I feel pretty embarrassed to have made [is that] I substantially underestimated what the scale of a market crash could look like,”

"I had embarrassingly little knowledge about what was going on,”

The more he can claim the innocent 'i was just to naive and dumb' to have done this on purpose and 'I've learned my lesson' BS that all will be hard to indict without solid evidence. I don't believe for one second what that loser says right now. Cuff him!

He is a sociopath and should be in jail for long time for all the immense harm he caused in running a known Ponzi of literally billions. He is no different than Madoff or Holmes. Acting like a messiah and a fake genius for all these years while full well knowing he and his cohorts were fraudulently offering unrealistic investment returns. Living rich off people's deposits they will never get back.

Where is his ex girlfriend? The one who actually RAN Alameda. Why are we not hearing about her at all? She should probably be first in cuffs

rayiner• 4 years ago

As a lawyer, I would say that giving detailed interviews about all of the crime-ing you did is a pretty poor effort at "not going to jail."

Everything SBF is doing is in singular pursuit of not going to jail

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