Sam Bankman-Fried, who once commanded one of the world’s biggest cryptocurrency exchanges, has been found guilty of fraud and money laundering. After a month-long trial, the jury delivered its verdict in less than five hours.
The former billionaire, aged 31, had been positioned as the boy king of crypto thanks to his firm FTX, which was once valued at over $32 billion. Bankman-Fried had positioned himself as a sort of median figure between the growing crypto market and that of traditional finance, throwing his weight behind regulation of the field while selling FTX to the masses through glossy marketing campaigns featuring the likes of Tom Brady and Larry David.
FTX went bankrupt last November. Prosecutors put forward the case that Bankman-Fried’s crypto trading firm Alameda Research received deposits on behalf of FTX customers from the early days of the exchange, when traditional banks were unwilling to let it open an account. Rather than safeguard these funds, something Bankman-Fried publicly promised, he used them to repay Alameda lenders, as well as buy property for himself and make political donations.
When FTX went bankrupt, Alameda owed the firm $8 billion. Bankman-Fried had pleaded not guilty, claiming that his mistakes were not deliberate acts of malice. Three of his former close friends and colleagues, including his ex-girlfriend Caroline Ellison, pleaded guilty and agreed to testify against him in hopes of reducing their own sentences. Bankman-Fried took to the stand in his own defense, a move that was widely seen as a mistake. He could now face over a century in jail.
The downfall of Bankman-Fried is yet another reminder that finance bros will not save the world, and turning them into cult-like figures of altruistic joy is narcissism at its most potent. Bankman-Fried tried to replicate figures like Steve Jobs by putting on a specific public image that gave him a strong brand, in his case wearing t-shirts and shorts to all events and driving a beat-up car everywhere. Business figures and publications fawned over him as the boy genius who would make crypto mainstream. Michael Lewis wrote a whole damn book propagandizing this dude. The evidently shoddy foundations of cryptocurrency have long been noted by journalists who actually know what they’re talking about, but still, the industry hopes to prop up lone wolves who can save the world while they line their own pockets.
As a student at MIT, Bankman-Fried went to a talk on ‘effective altruism’, the philosophy that suggests making lots of money for yourself is good because it means you have more to give away to philanthropic causes. He claimed this was his driving force with FTX, although such notions typically overlook that making obscene amounts of cash is seldom done fairly or to the benefit of the majority of people (like, try paying your taxes instead?)
As assistant US attorney Nicolas Roos said in his closing argument, ‘he took the money. He knew it was wrong. He did it anyway, because he thought he was smarter and better and that he could figure his way out of it.’
There is no such thing as a good billionaire. Enjoy prison, Sam.