Is the Sam Bankman-Fried Story Over?

Last
month,
I
attended
Sam
Bankman-Fried’s
sentencing
hearing.
Not
that
anyone
asked,
but
I
have
some
thoughts.

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Former
crypto
king
Sam
Bankman-Fried
was
sentenced
to
25
years
in
prison
last
month.
Just
like
during
last
year’s
trial,
CoinDesk
journalists
were
in
attendance.

The
sentencing
hearing
took
1
hour
and
59
minutes.
In
that
time,
we
heard
from
Judge
Lewis
Kaplan,
defense
attorney
Marc
Mukasey,
Assistant
U.S.
Attorney
Nicholas
Roos,
an
FTX
creditor,
an
attorney
representing
other
FTX
creditors
and
Bankman-Fried
himself.
In
some
respects,
the
hearing
was
a
final
chance
for
everyone
–
the
judge
exorcized
some
demons
in
summing
up
who
he
thought
Bankman-Fried
was,
the
prosecutor
dropped
a
final
nail
into
Bankman-Fried’s
coffin
and
the
former
CEO
whiffed
his
last
chance
to
define
himself
in
court.

The
hearing’s
brevity
perhaps
belied
its
significance.
The
judge
presiding
over
the
case
first
worked
through
various
objections
the
defense
had
to
sentencing
guidelines
recommendations
made
in
the
Presentence
Investigation
Report,
disagreeing
with
the
defense’s
objections
to
how
the
crimes
Bankman-Fried
was
convicted
of
were
characterized
and
landing
at
a
baseline
sentence
of
110
years.

Sunil
Kavuri,
a
vocal
FTX
creditor,
and
FTX
creditor
group
attorney
Adam
Moskowitz
both
spoke.
Kavuri
pushed
back
against
the
defense
argument
that
creditors
haven’t
suffered
any
real
losses
because
they’ll
get
their
money
back,
but
mostly
directed
his
ire
at
the
current
bankruptcy
team
(prompting
the
judge
to
interrupt
him
twice).
Moskowitz
spoke
of
the
cooperation
he
received
from
FTX
insiders
in
trying
to
secure
funds
for
creditors,
including
“Sam
and
his
team,”
asking
the
judge
to
keep
that
under
consideration.

New
defense
counsel
Mukasey
said
Bankman-Fried
was
a
“beautiful
puzzle”
who
didn’t
intend
to
harm
anyone
and
was
not
malicious.
Roos
repeated
the
closing
statement
he
made
at
trial,
saying
Bankman-Fried
stole
funds
–
and
even
if
he
didn’t
spend
it
on
cars,
that
doesn’t
mean
he
wasn’t
greedy.

Bankman-Fried
spoke.
A
defense
attorney
I
spoke
to
before
the
hearing
said
it
would
be
a
bad
idea
for
him
to
say
anything.
The
consensus
among
observers
after
the
hearing
was
that
Bankman-Fried
didn’t
really
help
his
case.
He
said
FTX’s
customers
are
who
matter,
shouted
out
many
of
his
former
colleagues
and
their
efforts
and
said
his
management
led
to
FTX’s
2022
bankruptcy
before
veering
off-topic,
blaming
the
bankruptcy
estate
for
the
fact
creditors
haven’t
received
refunds
yet.

“I
made
a
series
of
bad
decisions,”
he
said.
“They
weren’t
selfish
decisions.
They
weren’t
selfless
decisions.
They
were
bad
decisions.
And
those
culminated
with
a
bunch
of
other
factors
along
with
the
liquidity
crisis
for
Alameda
in
November
of
2018.
It
wasn’t
bankrupt.
FTX
wasn’t
bankrupt.
Alameda
wasn’t
bankrupt.
There
were
no
losses
to
socialize
to
customers.”

“My
useful
life
is
probably
over,”
he
said
at
one
point.

He
reiterated
his
previous
stance
that
customers
“could
have
been
paid
back,”
saying
there
are
currently
enough
assets
–
and
have
been
–
to
repay
customers
in
full.
And
again,
he
hinted
that
current
FTX
CEO
John
J.
Ray
III
and
the
bankrupt
exchange’s
cleanup
crew

were
doing
something
wrong.

“This
isn’t
the
time
or
place
to
tell
that
full
story
for
why
they
are
still
waiting,
for
why
they
are
not
sure
if
they
are
going
to
get
petition-date
value
or
current
values,”
he
said.
“But
a
good
place
to
start
with
is
Dan
Friedberg’s
affidavit
that
he
filed
a
bit
over
a
year
ago
in
bankruptcy
court.
It
was
a
brief
affidavit.
I
don’t
think
he
made
a
lot
of
friends
for
filing
that.
I
suspect
he
made
some
enemies.”

He
closed
by
saying
there
was
“an
opportunity”
for
his
former
colleagues
or
someone
“to
do
what
the
world
thought
I
would
do.”

AUSA
Roos
pointed
to
this
in
his
own
statement,
arguing
Bankman-Fried
hadn’t
accepted
responsibility
for
the
collapse
of
FTX,
just
that
he
seemed
to
say
things
could
have
worked
out
differently
if
he
hadn’t
made
the
mistakes
he’d
made.

And
finally,
it
was
the
judge’s
turn
again.

Over
the
past
few
months
of
watching
Judge
Kaplan
during
pretrial
hearings
and
the
trial
itself,
I’ve
come
to
appreciate
just
how
on
top
of
this
case
he
has
been.
He’s
got
a
busy
docket
–
one
of
his
other
cases
features
a
former
U.S.
president
as
a
party,
for
example
–
but
he
has
been
a
colorful
figure
when
addressing
Bankman-Fried’s
trial
details.

This
is
a
judge
who
seems
to
recognize
that
he’s
going
to
be
quoted
in
press
reports
and
filings
for
quite
some
time
to
come.
His
actions
during
the
entire
case
will
certainly
be
scrutinized
when
Bankman-Fried’s
appeals
last
year’s
guilty
verdict.

“I
reject
entirely
the
defendant’s
argument
that
there
was
no
actual
loss,”
he
said
at
the
outset
of
the
hearing.
“The
defendant’s
assertion
that
FTX
customers
and
creditors
will
be
paid
in
full
is
misleading,
it
is
logically
flawed,
it
is
speculative.”

It’s
no
secret
that
the
judge
appears
to
have
a
dim
view
of
Bankman-Fried.
He
was
all
but
openly
derisive
toward
the
former
crypto
mogul
when
Bankman-Fried
testified
during
the
trial
itself,
to
the
point
where
I
did
genuinely
wonder
how
the
jury
perceived
his
comments
about
the
defendant
on
the
stand.
Eighteen
random
members
of
the
public,
who
had
no
little
or
no
familiarity
with
FTX,
crypto,
Bankman-Fried
or
being
on
a
jury,
may
well
have
easily
taken
cues
from
the
most
visible
legal
expert
who
ran
the
show.
Judge
Kaplan
sent
the
jury
out
for
some
part
of
his
“what
are
you
all
doing?”
lectures
but
he
couldn’t
or
didn’t
hide
his
disdain
for
the
defendant
all
the
time.

Of
course,
Sam
did
not
help
his
case
much.
Despite
the
polished
responses
he
provided
his
own
counsel,

he
floundered
against
the
slightest
pushback
during
cross-examination,
as
my
colleagues
and
I
noted
last
year.

Judge
Kaplan,
when
he
spoke
during
the
sentencing
hearing,
had
an
air
of
a
man
finally
able
to
unleash
the
full
force
of
his
disdain.
He
cited
three
specific
examples
of
when
he
believed
Bankman-Fried
committed
perjury
on
the
stand,
and
didn’t
just
rely
on
a
general
idea
that
he
perjured
himself
simply
by
pleading
not
guilty
and
being
convicted.

“I
did
not
think
it
a
fruitful
use
of
time
to
spell
out
every
time
I
thought
Mr.
Bankman-Fried
testified
willfully
and
knowingly
falsely
at
trial.
There
are
more
than
the
ones
I’ve
articulated,
but
that
suffices,”
the
judge
said.
“And
when
he
wasn’t
outright
lying,
he
was
often
evasive,
hairsplitting,
dodging
questions
and
trying
to
get
the
prosecutor
to
reword
questions
in
ways
that
he
could
answer
in
ways
he
thought
less
harmful
than
a
truthful
answer
to
the
question
that
was
posed
would
have
been.”

It’s
a
harsh,
but
accurate
assessment
of
Bankman-Fried’s
performance
on
the
stand.
His
performance,
as
the
judge
put
it,
was
awful.
I’m
somewhat
sympathetic
to
the
idea
that
being
in
jail
made
it
difficult
for
Bankman-Fried
to
properly
prepare
for
cross-examination,
but
he

seemed
to
resent
his
narrative
being
questioned
during
his
testimony
and
it
undoubtably
made
an
impression
on
the
jury,
witnesses
and
the
judge.

More
than
that,
Bankman-Fried
didn’t
quite
seem
to
grasp
how
his
demeanor
and
responses
were
received
by
the
judge
and
jury.
This
was
true
last
year
and
remained
true
last
month.

“I’ve
been
doing
this
job
for
close
to
30
years,”
the
judge
said.
“I’ve
never
seen
a
performance
quite
like
that.”

A
friend
asked
me
what
I
thought
of
the
sentence
after
it
was
handed
down.
I
don’t
know
yet.
I
agree
with
AUSA
Roos,
who
told
the
jury
–
and
later,
the
judge
–
Bankman-Fried
lied
during
the
course
of
FTX’s
life.

“He
spent
his
customers’
money
and
he
lied
to
them
about
it.
Where
did
the
money
go?
The
money
went
to
pay
for
investments,
to
repay
loans,
to
cover
expenses,
to
purchase
property,
and
to
make
political
donations,”
Roos
said
last
year.
During
the
sentencing
hearing,
he
went
further,
saying,
“the
fact
that
Mr.
Bankman-Fried
spent
the
money
on
investments,
rather
than
sports
cars,
or
whatever
you
might
expect
for
someone
classically
greedy,
does
not
make
him
not
greedy
or
does
not
express
a
motive
of
greed.
The
fact
that
he
had
ambitions
that
seem
altruistic
does
not
make
him
not
ambitious,
is
not
a
motive
for
doing
these
things.”

In
other
words,
Bankman-Fried
may
genuinely
believe
that
using
his
companies’
funds
for
pandemic
preparedness
and
other
purposes
was
for
the
net
benefit
of
humanity,
but
it
doesn’t
mean
he
didn’t
use
customer
funds
or
lie
about
it.

Does
that
warrant
25
years
in
prison?
Perhaps.
But
I
also
want
to
touch
on
something
I
wrote
when
he
was
first
convicted
–
25
years
is
a
long
time.
The
world
moves
quickly,
more
quickly
than
we
can
immediately
appreciate
in
our
day-to-day
lives.
This
time
25
years
ago,
people
used
pagers
and
car
phones
were
just
finally
dropping
out
of
popularity.
Steve
Jobs
was
years
away
from
sparking
the
smartphone
revolution,
GeoCities
was
an
exciting
Yahoo!
product
and
Pokémon
was
just
three
years
in.

Bankman-Fried’s
new
legal
team
is
going
to
appeal.
We’ve
known
he
would
appeal
since
the
start
of
his
trial.
There’ll
be
a
hearing,
and
it’s
anyone’s
guess
how
the
appeals
court
may
rule.
But
from
my
view
as
a
reporter,
it’ll
be
a
long
shot
for
his
team.

We’re
closing
this
chapter
on
Bankman-Fried,
though
as
we’ve
seen,
jail
won’t
stop
him
from
sharing
his
views
and
so
the
book
remains
open.

If
you’ve
got
thoughts
or
questions
on
what
I
should
discuss
next
week
or
any
other
feedback
you’d
like
to
share,
feel
free
to
email
me
at

nik@coindesk.com
or
find
me
on
Twitter

@nikhileshde.

You
can
also
join
the
group
conversation
on

Telegram.

See
ya’ll
next
week!