Sam Bankman-Fried found guilty in FTX crypto fraud case:
FTX founder Sam Bankman-Fried has been found guilty on all seven counts of fraud, conspiracy and money laundering following more than two weeks of testimony in one of the highest-profile financial crime cases in years.
The 31-year-old former cryptocurrency billionaire was convicted of two counts of wire fraud conspiracy, two counts of wire fraud and one count of conspiracy to commit money laundering, charges that each carry a maximum sentence of 20 years in prison. He was also convicted of conspiracy to commit commodities fraud and conspiracy to commit securities fraud, which each carry a five-year maximum sentence.
"Sam Bankman-Fried perpetrated one of the biggest frauds in American history, a multibillion-dollar scheme designed to make him the king of crypto," Damian Williams, U.S. attorney for the Southern District of New York, said in a news briefing following the verdict. "Here's the thing: the cryptocurrency industry might be new. The players like Sam Bankman-Fried might be new. This kind of fraud, this kind of corruption, is as old as time, and we have no patience for it."
The MIT graduate steadfastly maintained his innocence since his arrest late last year after the startling implosion of FTX, the crypto exchange he co-founded, amid an $8 billion shortfall in funds and allegations he had used customer money to prop up his struggling hedge fund, Alameda Research.
[...] Defense attorneys sought to portray Bankman-Fried as a math nerd who made poor management decisions at FTX, but who had nothing criminal in mind while building his crypto empire.
In the end, it was perhaps the hubristic display during Bankman-Fried's own testimony that bore the most weight, and did the most damage. Under the prosecution's cross-examination, Bankman-Fried said "over 140 times" that he couldn't remember a document, conversation or other key details. The government said, again and again, that was because "he was lying."
[...] It is now up to the judge, Lewis Kaplan, to determine what Bankman-Fried's sentence will be. While the charges carry a statutory minimum of 110 years, and sentencing guidelines provide a type of formula, the judge has wide-ranging discretion to rule below that guidance. However, CBS News legal analyst Rikki Klieman says if Judge Kaplan "believes the defendant was committing perjury in his courtroom, he might even go above the guidelines."
For her part, Tien, the former FTX employee, said that jail time might too harsh, wondering if Bankman-Fried could perhaps instead help the government investigate other potential crypto-trading fraud.
The next trial in the saga of the United States vs. Sam Bankman-Fried is scheduled for March, 11, 2024, when other charges that the government did not bring forward will be folded into yet another court proceeding.
This trial concludes almost one year to the day FTX stopped allowing customers to withdraw deposits, which marked the beginning of the end of the so-called crypto king's meteoric rise.
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Convicted FTX fraudster Sam Bankman-Fried pleaded for a lenient prison sentence in a court filing yesterday, saying that he isn't motivated by greed and "is already being punished."
Bankman-Fried requested a sentence of 63 to 78 months, or 5.25 to 6.5 years. Because of "Sam's charitable works and demonstrated commitment to others, a sentence that returns Sam promptly to a productive role in society would be sufficient, but not greater than necessary, to comply with the purposes of sentencing," the court filing said.
[...] The filing urged the court to "reject the PSR's barbaric proposal" of 100 years, saying that such sentences should only be for "heinous conduct" like terrorism and child sexual abuse.
The founder and ex-CEO of cryptocurrency exchange FTX, Bankman-Fried was convicted on seven charges with a combined maximum sentence of 110 years after a monthlong trial in US District Court for the Southern District of New York. The charges included wire fraud and conspiracy to commit wire fraud, securities fraud, commodities fraud, and money laundering.
[...] Kaplan said before the trial that SBF "could be looking at a very long sentence" if convicted. After the conviction, law professors were quoted as saying that Bankman-Fried's sentence was likely to be at least 20 or 25 years and conceivably as much as 50 years.
[...] "Sam was not predatory. He did not set out to prey on the elderly, the unsophisticated, or implement a plan to poach pension assets. His conduct falls far lower on the culpability scale," the filing said. He also "never intended to cause loss for the purpose of his own personal gain," his legal team said.
Bankman-Fried's conduct should be characterized as "risk shifting," the filing said. Risk-shifting "offenses are not specifically intended to cause loss. Instead, they shift the risk of any potential loss from the defendant (or from others involved in the criminal undertaking) to a third party, such as the victim of the offense."
According to Bankman-Fried's legal team, this makes his offenses similar in severity to "false statements for the purpose of obtaining a bank loan that is intended to be repaid. Such offenses are generally less culpable than those where loss is specifically intended."
[...] Bankman-Fried's sentencing submission was accompanied by letters of support from his parents and others. His mother, Barbara Fried, wrote that "Sam is the first person we would call if we needed an angel of mercy in a pinch," and that he "lived an exemplary life in every way prior to the events that brought FTX down."
(Score: 5, Insightful) by Rosco P. Coltrane on Friday November 03 2023, @02:56PM (9 children)
For a conman to pull off a con, he needs suckers.
(Score: 2) by captain normal on Friday November 03 2023, @03:45PM (5 children)
There seems to be plenty of those in this country. As someone once said "there's one born every minute".
The Musk/Trump interview appears to have been hacked, but not a DDOS hack...more like A Distributed Denial of Reality.
(Score: 2, Flamebait) by mcgrew on Saturday November 04 2023, @04:55PM (4 children)
Donald Trump has proved since 2016 that it's at least half of Americans. I see him as history's most successful con man. Hell, even when he gets caught he comes out ahead, like those $15,000 worth of fines? That's like fining me fifty cents for doing 150 in a school zone.
World's greatest fraudster.
Poe's Law [nooze.org] has nothing to do with Edgar Allen Poetry
(Score: 2) by captain normal on Saturday November 04 2023, @05:55PM (3 children)
I don't think it's 50%, more like 35 ~ 40 %. The real problem is that since the Harding and Coolidge administrations the captains of capitalism have been hacking the Constitution in favor of the grossly wealthy. Leading to the Great Depression. Now a hundred years later (after the populist scams of Nixon, Reagan and now Trump) we find ourselves once again on the verge an even greater depression. If the people in this country don't wake up, maybe in the wake of the coming depression (and next war) we, or our children and grandchildren, will learn to limit the power of finance and business like the founding fathers set limits on the power of religion in the very first Amendment Of the Constitution of the United States.
The Musk/Trump interview appears to have been hacked, but not a DDOS hack...more like A Distributed Denial of Reality.
(Score: 1) by khallow on Sunday November 05 2023, @01:35AM
I think this is a classic example of unintended consequences in governance and regulation. Finance and business are heavily limited. The limits just had the effect of concentrating business power into a few hands.
(Score: 2) by mcgrew on Sunday November 05 2023, @08:08PM (1 child)
In his book Saving Capitalism Robert Reich points to even more depressions caused by the same thing. It's an excellent book, I recommend it.
Poe's Law [nooze.org] has nothing to do with Edgar Allen Poetry
(Score: 2) by captain normal on Monday November 06 2023, @12:07AM
https://www.youtube.com/watch?v=yAuLUJx73f0 [youtube.com]
The Musk/Trump interview appears to have been hacked, but not a DDOS hack...more like A Distributed Denial of Reality.
(Score: 3, Interesting) by Thexalon on Friday November 03 2023, @04:58PM
This scam wasn't hard to figure out, really, it was this old game, if you follow the dollars:
1. Suckers give the scammer money.
2. Scammer keeps some of that money for himself, and spends most of his time recruiting new people.
3. If a sucker asks for their money back, pay it back with a bit extra (taken from other suckers).
4. Continue until you run out of sucker money to pay the suckers back.
This is basically the standard Ponzi outline.
The crypto stuff in this situation had 2 major functions:
- It weeds out a lot of non-suckers who know crypto is fundamentally a scam that by its very nature rewards people who get in early and get out while suckers are still buying in.
- Most suckers don't understand the math but don't want to admit they don't understand the math, so the math becomes a very useful misdirection that gets you watching the crypto coins and not the dollars.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by Beryllium Sphere (r) on Friday November 03 2023, @10:50PM
Humans are full of security vulnerabilities. It's not a character flaw to have them.
(Score: 2) by istartedi on Friday November 03 2023, @11:39PM
Also, "You can't con an honest man". This is not true in every case, which in some ways makes it a great quote on the subject of cons. Anyway, a considerable number of cons rely on the sucker being dishonest. Crypto in general tends to attract money laundering, ransom seekers, drug dealing, etc. They aren't all bad people; but there are a lot of them.
Appended to the end of comments you post. Max: 120 chars.
(Score: -1, Troll) by Anonymous Coward on Friday November 03 2023, @03:09PM (3 children)
As a one-time acquantance of SBF, I still believe that the root of his issue was that he was trusting others and didn't realize the massive structural issue between Alameda and FTX. It's a shame that he was trying to have the first really trustworthy crypto exchange and was sunk by Alameda taking advantage of their privileged position.
(Score: 5, Informative) by Rosco P. Coltrane on Friday November 03 2023, @03:21PM
What are you talking about? Alameda Research was run by Bankman-Fried and his girlfriend. Both Alameda and FTX knew exactly what the other was doing because it was the same dude running both shows.
(Score: 5, Informative) by Thexalon on Friday November 03 2023, @03:25PM
According to the evidence presented at trial:
1. He was running Alameda too.
2. He was lying, both publicly and privately, about where those assets were going and what was happening to them, and how much they were winding up in his own pocket.
3. He was breaking numerous banking rules to put some of that money into his own pocket.
This wasn't a question of who he trusted, unless you believe that what actually happened was everybody around him lying about what he was doing.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 4, Insightful) by JoeMerchant on Friday November 03 2023, @06:35PM
Funny thought: SBF should be glad the death penalty isn't an option for fraud. Otherwise the Bankman would be Fried.
🌻🌻 [google.com]
(Score: 5, Insightful) by sjames on Friday November 03 2023, @04:48PM (11 children)
Until recently, SBF was yet another master of the universe the financial world told us we should look up to and strive to be more like.
The thing is, this crap keeps happening.
More and more, people featured in Forbes as up and coming end up indicted. Perhaps it's time for some more productive sector of the economy to run things. Perhaps people who actually invent things, discover things, make things, etc rather than people who just claim credit as if they did it with their own two hands.
(Score: 0) by Anonymous Coward on Friday November 03 2023, @06:27PM (2 children)
SBF *was* one of us. He is probably just one person removed from several people who frequent this site, if I had to guess. Professional student, tech guy, math major, about our age.
The problem is the system itself. This kind of scheme should not have been possible, and certainly not championed by the complicit media.
(Score: 3, Touché) by janrinok on Friday November 03 2023, @06:43PM
To the best of my knowledge, we have at least one community member who is in his late teens, and I and several others are now into our 70s. So I suppose it is a fair bet that SBF was 'about our age'.
I am not interested in knowing who people are or where they live. My interest starts and stops at our servers.
(Score: 2, Insightful) by khallow on Friday November 03 2023, @08:09PM
And large scale fraudster. My take is that anyone with enough obsession over money and power to commit a scam on this scale isn't interested in the zero stakes of SN.
(Score: 5, Interesting) by JoeMerchant on Friday November 03 2023, @06:33PM (1 child)
"people featured in Forbes as up and coming end up indicted"
Forbes is an old fool with morals directly derived from the same period of the 1800s as his tea and opium trading family money.
As for: "... Bankman-Fried could perhaps instead help the government investigate other potential crypto-trading fraud."
I think that's almost a great idea. Let's try: Bankman-Fried will help the government investigate other potential crypto-trading fraud, from his jail cell, and earn his way to a reduced sentence with each case he supports successful prosecution of. I see a simple math-nerd formula for this: 110 year sentence for 8 billion in fraud, give him proportional credit for his assistance in future cases anywhere from 5% for giving the investigators a valuable tip of where to look up to 100% when his assistance was instrumental in obtaining a conviction. If he gets 40% credit for conviction in a 500 million fraud case, that's 200 million - out of his 8 billion he's working down, or 2.75 years off his 110 year sentence. By the time he gets credit for $8B in convictions, he should be fairly well trained as an investigative consultant and should be able to earn his living "on the outside" doing that job for $60K per year, instead of selling smoke and mirrors and living large on other people's money.
🌻🌻 [google.com]
(Score: 2) by janrinok on Friday November 03 2023, @06:45PM
Damn, now I don't know which way to moderate this - Funny or Interesting!
I am not interested in knowing who people are or where they live. My interest starts and stops at our servers.
(Score: 2) by DeathMonkey on Friday November 03 2023, @08:50PM (3 children)
Back in the day people at places like Forbes would do some actual research on the people they were writing about and breaking the news they were fraudulent would win people awards and stuff.
Now they don't have the budget for that sort of thing.
(Score: 1, Insightful) by Anonymous Coward on Friday November 03 2023, @09:11PM
Eh, they're just another tabloid in the mass media cesspool.
(Score: 2) by Beryllium Sphere (r) on Friday November 03 2023, @10:33PM (1 child)
The old Forbes did deep investigative journalism and landed hard blows. Malcolm Forbes once wrote something very close to "Meyer Blinder is not 'controversial'. Meyer Blinder is a crook."
(Score: 0) by Anonymous Coward on Monday November 06 2023, @09:23PM
Pot.. Kettle... Meyer Blinder just wasn't very smart
(Score: 2, Touché) by crafoo on Friday November 03 2023, @11:50PM (1 child)
how anti-Semitic of you
(Score: 2) by Freeman on Monday November 06 2023, @03:06PM
Anti-idiot, isn't anti-semitic. His race had nothing to do with his lack of morals.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 3, Insightful) by Beryllium Sphere (r) on Friday November 03 2023, @10:42PM
Like theoretical peak floating point performance on a supercomputer, those happen only if everything lines up.
The sentencing guidelines are an algorithm with points and charts. Without a bunch of prior convictions the recommended number is going to be way less than the maximum, despite all the enhancements he gets for the amounts involved and having a leadership role.
On the other hand, Madoff scored a 150 year sentence.
(Score: 2) by mendax on Saturday November 04 2023, @06:25AM
That SBF was found guilty, and so quickly, was not much of a surprise. The government had him dead to rights. Furthermore, I think the judge did the right thing in revoking his bail and keeping in jail not just because of the apparent witness tampering and intimidation he got caught doing but because I feel he was a genuine flight risk. If I were free on bail and I saw the huge wall of evidence presented against me during the trial and contemplated the decades of time I'd have to spend in prison I think I would seriously contemplate flight as well. As to where he could go I don't know. He would have had to surrender his passport. Maybe the Russian Embassy. Perhaps Putin would take him as he did Edward Snowden. Anyway, as to the sentence he will draw, I am curious as to what that would be. He's a first offender but then so was Bernie Madoff and he got the book thrown at him. Certainly decades in prison given the magnitude of the fraud and money laundering he committed. And because of the length of time he would have to serve, he probably would not be housed in one of the unfenced Club Fed camps but in either an low- or medium-security FCI or a high-security USP filled with some of the dregs of humanity. But then given the seriousness of his crimes and the amount of money that was lost, perhaps it would be fitting for him to be considered another one of the dregs and be tossed into a high-security Sodom. I will be watching with baited breath to see how this case eventually turns out.
It's really quite a simple choice: Life, Death, or Los Angeles.