On the Trial of Michael Bankman-Fried: The Case of a Wall-Censorship Thief who Steals Lies in Las Vegas
Bankman-Fried co-founded FTX in 2019, and it quickly became one of the biggest crypto exchanges in the world. During Bankman-Fried’s trial, his coconspirators testified that FTX falsified numbers to make the exchange look safer than it was and gave special secret privileges to Bankman-Fried’s trading fund, Alameda Research, that let it dip into FTX’s customer funds.
He was found guilty in less than four hours, but none of this was believable. And Kaplan witnessed the whole thing. The evasiveness, the bizarre word-salad answers, and Bankman-Fried’s tendency to answer questions he wished he had been asked rather than those he actually was asked worked against him. During sentencing, the judge said he’d never seen a performance like that in his 30 years on the bench.
What Bankman-Fried did not say was that he had, in fact, committed crimes and he wouldn’t do it again. He talked about how he assisted the FTX customers in dealing with the bankruptcy estate, as well as the fact that he hadn’t actually engaged in witness tampering. The investors with money that is gone, two of which went bankrupt, did not receive a word from him.
As Bloomberg reports, despite a jump in the value of FTX’s crypto holdings or its stake in the AI company Anthropic, Kaplan said, “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.”
Sam Bankman-Fried is a bull run, just a bad apple, and he’s not a good boy. The last bull run of Bitcoin is coming
It all suggested that he wasn’t sorry for what he’d done, despite what his lawyers said in the sentencing filing, “Those who know Sam know how deeply, deeply sorry he is for the pain he caused over the last two years.”
Bankman-Fried has been in the Metropolitan Detention Center for the past nine years because he broke his bail conditions. He sent his coconspirator and ex girlfriend’s private memos to a newspaper. Kaplan said Bankman- Fried engaged in witness tampering at least twice. According to his lawyers, Bankman-Fried has been having a bad time in jail, where he’s lost weight because the MDC doesn’t offer a decent vegan diet and has been subjected to “multiple extortion attempts.”
In November 2022, FTX’s impending collapse triggered a 22 percent drop in the price of Bitcoin in a single day. Bitcoin’s now at about $70,000, higher than the peak of the last cycle. I have been told by a suspiciously large number of people that Bankman-Fried is a one-off, just a bad apple. Since I’ve started following crypto, this is the third bull run I’ve seen. I don’t know who the main character is going to be this time, but I know there’s going to be one.
That is the way he views himself. He’s smart and good. John J. Ray III said in his filing, “Mr Bankman-Fried continues to live a life of delusion.”
To understand that he is lost and the jig is up, he would have to acknowledge that he isn’t as smart as he thought he was and that he isn’t a good boy. If we leave aside FTX’s matryoshka doll of crime, he’s better behaved than me, because I sat through a lot of his good boy credentials. I have also been told many, many times that he’s smart. Private school. MIT. Jane Street. You get it.
Bankman- Fried has an arrogance that is Shakespearean in scale. A number of forms can be taken for arrogance. You don’t need to follow the dress code for an event where you are so important, that you don’t need to dress up. Another way is paying one of the biggest political bribes in history because you want to have your way. A third is determining that you, personally, must have the biggest charitable impact in the world.
The 25-year sentence (and $11 billion forfeiture) Kaplan gave had a lot to do with Bankman-Fried’s propensity for gambling. a math nerd is doing what Bankman-Fried called “cost / benefit analysis” It was the math that did him in.
He told her that if there was a coin with tails that destroyed the world and heads that made it better, he would gamble on flipping it. If there were greater chances that life and civilization on Earth would come to fruition without that catastrophe, that is really what a man would be willing to flip a coin on.
Kaplan said that the mathematical wizard was viewing the cost of getting caught, discounted by probability or improbability, against the gain of getting away without getting caught. “That was the game. It started at least as early as Jane Street The firm Bankman- Fried joined straight out of college. It is his nature. And you don’t have to take my word for it — everybody has said that.”
I have heard a lot, throughout this trial, about Bankman-Fried’s vaunted intelligence. I have been told, in documents filed by the defense, that he is simply misunderstood because he is autistic. I witness him perjure himself on the stand. Judge Lewis Kaplan made three examples of the perjury, which included Bankman-Fried lying about not knowing Alameda spent FTX customer funds, and asking it to repay its debts. I do not think lying on the stand is a symptom of autism.
Bankman- Fried believes there is a chance to do what the world expects of him and at least temporarily, what he hopes to do for the world. “And 300 people that I used to work with, incredibly talented, selfless, impressive people were looking for something to do. Hopefully they will do what they can to benefit the world, not just my own failures.
He had to say he was sorry without actually admitting anything because he was appealing the verdict. But I was absolutely astonished when he began talking about how FTX employees had been robbed of their chance to build something wonderful and that they should get together to, essentially, create an FTX equivalent.
It struck me that Bankman-Fried was going with the strategy he’d outlined in a document, submitted as evidence by the prosecution. He was going to point the finger at the bankruptcy lawyers in points 4 and 5, and 6 and 9.
At his sentencing, I sat several rows behind Bankman-Fried, clad in prison khaki and clanking faintly when he walked from the shackles on his feet, while he gave his statement to the court. “I’m sorry about what happened at every stage,” Bankman-Fried said. I failed all of them.