Joann Wypijewski in Sidecar:
‘I don’t think smart people should go to jail’, a young observer who works in crypto remarked outside one of the biggest fraud trials in US history. Samuel Bankman-Fried, the former CEO of the crypto exchange FTX and most famous advance man for the brave new ‘democratic’ alternative to the corrupt old world of cash and wing-tip finance, was the allegedly smart person in question. Three days later, on 2 November, a jury convicted him of wire fraud, conspiracy and money laundering. For his crimes, Bankman-Fried, 31, faces a maximum sentence of 110 years in prison.
The jury took just a few hours to conclude that he had siphoned off FTX customer funds to its sister hedge fund, Alameda Research, which spent, transferred or gambled that money away. For years he had assured customers that their funds were protected. Even when he knew $8 billion in customer money was gone, and no assets existed to repay it, he tweeted, ‘FTX is fine. Assets are fine’. It was necessary, he’d told his lieutenants, to send out ‘a confident tweet’ as customers frantically tried to withdraw their assets.
My young interlocutor hadn’t thought Bankman-Fried was innocent exactly, but fraud happens all the time, and Think how much good smart people can do in the world! The fallen tycoon’s smarts were much-invoked at trial, by both prosecution and defence.
More here.